South African Property Opportunities Regulatory News (SAPO)

10 Jul 2007 13:19

South African Property Opps PLC10 July 2007 SOUTH AFRICAN PROPERTY OPPORTUNITIES PLC ("SAPRO" or the "Company") Further Property Acquisition SAPRO today announces the exchange of contracts for the acquisition of a sitefor a significant strategic investment which will comprise a 146.6 hectareresidential development, with a retail component, in a rapidly growing area eastof Pretoria (the "African Renaissance Development"). Upon completion, the site,of which the majority is undeveloped vacant land, is expected to yield anestimated 252,920sqm of gross building area (233,920sqm residential and19,000sqm retail) after planning has been obtained. It is situated directlyeast of Pretoria's Central Business District in Hazeldene - a node that hasexperienced significant residential growth over the past few years. Thedevelopment will be primarily aimed at South Africa's rapidly growing blackmiddle class. Key points for the investment: * The African Renaissance Development is a joint venture with three individuals,one of whom is a local real estate project manager, one a building contractorand the other a quantity surveyor, who secured the opportunity andconceptualised the development plan over the last two years. SAPRO will have a64 per cent. interest in the development vehicle. * The joint venture partners (the "Partners") have applied for planning to buildapproximately 3,200 residential units (apartments and freehold stands) and aretail centre on the site. It is expected that building will commence in 2008and that the total length of the build-out will be seven years. * The development is expected to represent a total investment by the Partners ofR2.57 billion (£181.41) million, consisting of land acquisition costs of R39.64million (£2.80 million) and estimated development costs of circa R2.53 billion(£178.61 million). The land acquisition and initial working capital requirementsof the joint venture totalling R83.75 million (£5.91 million) will be fundedentirely out of the cash resources of SAPRO. The Partners will seek up to R2.50billion (£176.56 million) of bank financing for the build-out phase (althoughthe total amount outstanding in any one calendar year will be considerably lessthan this). * The transaction is SAPRO's largest residential investment to date and bringstotal equity invested to R436 million (£31 million). Brian Myerson, a director of SAPRO, commented: "We are delighted to have closedwhat has been a complex transaction to acquire this 146.6 hectare site in theoutskirts of Pretoria. It will be a major new development supplying thecontinuing strong demand for first buyer homes in the South African market andbrings further breadth to the Company's portfolio. We have now fully committedthe funds raised at the Company's launch in October last year and the pipelineremains very strong." Further enquiries: SAPROAnne Dalen/James Peggie+44 20 7240 3222 Teather & GreenwoodJonathan Becher+44 207 426 9000 Bell PottingerMike Davies/ Dan de Belder+44 207 861 3232 This information is provided by RNS The company news service from the London Stock Exchange