South African Property Opportunities Regulatory News (SAPO)

21 Jun 2007 09:32

South African Property Opps PLC21 June 2007 FOR IMMEDIATE RELEASE 21 June 2007 SOUTH AFRICAN PROPERTY OPPORTUNITIES PLC ("SAPRO" or the "Company") Further Property Acquisition SAPRO is pleased to announce the exchange of contracts for the acquisition ofthe site for a significant strategic investment which will comprise a 15.6hectare, highly prominent, mixed use development (commercial, residential andretail) in Fourways, Johannesburg (the Longmeadow Development). The site, themajority of which is undeveloped vacant land, together with a number of smallcommercial structures, should yield an estimated 132,000m(2) of gross lettablearea after rights have been granted. It is situated approximately 5 miles to thenorth of Johannesburg's Sandton Central Business District in the Fourways node.Fourways is one of the fastest growing nodes in South Africa with one of thehighest per capita income profiles in the country. Key points for the investment: * The Longmeadow Development is a joint venture with three partners comprising aJohannesburg listed property company and a local contractor (both of whom SAPROhas joint ventured with in previous transactions) and a trust representing thevendor of the land (which will remain as a 27.46% shareholder in the jointventure) (see below regarding related party disclosure). SAPRO will have a 49.2per cent. interest in the development vehicle. * The joint venture partners ("the Partners") plan to apply for rights to buildhigh density residential apartments, commercial office space, hotels, and aniche retail component on the site. It is expected that building will commencein early 2008 and that the build-out period will be five years. * The development is expected to represent a total investment by the Partners of£151.7 million, consisting of an acquisition consideration of £9.7 million (withthe Partners providing a further £2 million for working capital) and a potentialdevelopment cost of circa £140 million. The acquisition consideration andinitial working capital will be paid out of the cash resources of the Partners,49.2% (£5.8 million) to be met by SAPRO. The Partners will seek bank financingfor the building-out cost of the development (although the total bank financingoutstanding in any one calendar year will be considerably less than this). * The vendor of the land is the Tauhara Trust, the beneficiaries of which arefour brothers of the Currie family. Richard Currie, Chief Investment Officer forProteus Property Advisors (Pty) Limited ("PPA"), which acts as investmentadviser to Proteus Property Partners Limited (together with PPA, "Proteus"),SAPRO's investment manager, does not have any interest in the Tauhara Trust, buthis father (Richard Currie senior) is one of the four beneficiaries of theTauhara Trust. Richard Currie senior and two of his brothers are retaining acombined effective 27.46% interest in the Longmeadow Development as one of thePartners. * The site comprises four separate contiguous pieces of land, and in additionthe Partners will own a further 50% interest in an adjacent site. * The transaction is SAPRO's largest investment to date and brings total equityinvested to £15.4 million. Brian Myerson, a director of SAPRO, commented: "We are delighted to have securedthis deal which represents one of the most prestigious and high profiledevelopment opportunities currently available in Johannesburg, as well asSAPRO's largest investment to date. The investment team at Proteus has beenworking extremely hard to secure opportunities for SAPRO over the last sixmonths and we will be updating shareholders shortly with further transactions." Further enquiries: SAPRO Anne Dalen/James Peggie +44 20 7240 3222 Teather & Greenwood Paul Fincham +44 207 426 9000 This information is provided by RNS The company news service from the London Stock Exchange