South African Property Opportunities Regulatory News (SAPO)

22 Jun 2007 10:43

South African Property Opps PLC22 June 2007 22 June 2007 SOUTH AFRICAN PROPERTY OPPORTUNITIES PLC ("SAPRO" or the "Company") SAPRO invests £9.8million in two major development opportunities in South Africa SAPRO is pleased to announce the exchange of contracts for a further two sitesoffering major development opportunities, with a combined investment commitmentby SAPRO of £9.8 million. The sites will comprise: * a 13.2 hectare high density residential development in Driefontein,Johannesburg (the Driefontein Residential Development). The site, which iscurrently undeveloped land, should yield an estimated 35,000m(2) of grosslettable area after rights have been granted. It is situated approximately 4miles south of Johannesburg's main international airport (OR Tambo). SAPROintends to develop an estate of approximately 500 units targeting the region'sfast growing middle income market. * a 12.95 hectare prominent mixed use site (commercial and retail) in Lenasia,Johannesburg (the Lenasia Development). The site, the majority of which isundeveloped vacant land, together with a commercial structure on part of thesite, should yield an estimated 51,600 m(2) of gross lettable area after rightshave been granted. It is situated immediately south of Soweto, an area to thesouth west of Johannesburg and the most densely populated urban residential areain South Africa. Key points for the Driefontein Residential Development: * The project is a joint venture with a local property developer. SAPRO willhave an 85 per cent. interest in the development vehicle. * The total investment required for the development will be approximately £17.1million over a four year period, including development costs of approximately£14.3 million to be met largely from bank financing. * SAPRO has committed £2.7 million to the project by way of both initial equitycommitment (as to £1.3 million) and mezzanine loan (as to £1.4 million) to beintroduced during the build-out phase. * The necessary planning applications have been submitted and a decision isexpected within the next 12 months. * It is expected that construction will commence in early 2009 and completedunits will be marketed in 2010 and 2011. Key points for the Lenasia Development: * SAPRO will have a 100 per cent. interest in the development vehicle. * The site is opposite a newly developed regional shopping mall, and is directlyalongside a major commuting route into Johannesburg from Lenasia, providingexcellent visibility. * SAPRO plans to apply for rights to build a mixed use retail and commercialdevelopment. It is expected that building will commence in early 2009 and thatthe build-out period will be 3 years. * The development is expected to represent a total investment of £39.3 million,consisting of an acquisition consideration of £4.3 million (with SAPRO providinga further £2.8 million for working capital) and a potential development cost ofcirca £32.2 million. The acquisition consideration and working capital will bepaid out of SAPRO's cash resources. SAPRO will seek bank financing for thebuilding-out cost of the development. These two transactions bring total equity invested by SAPRO to £25.2 million.Brian Myerson, a director of SAPRO, commented: "We are delighted to announce the first major residential development in our portfolio targeting the fast growing middle income market in South Africa, as well as a very significant development in Lenasia which again targets this segment of the market. Given South Africa's continuing strong economic growth and the resultant increase in the middle class, there should be strong end-user demand for these opportunities." Further enquiries: SAPRO Anne Dalen / James Peggie +44 20 7240 3222 Principle Capital Teather & Greenwood Paul Fincham +44 207 426 9000 Note to Editors: - South African Property Opportunities plc (SAPRO) is acompany investing in the South African property market. It listed on AIM inOctober 2006 raising £30 million and raised a further £33.5 million in April2007. SAPRO was established to invest in the South African property market with a viewto generating attractive returns, principally through capital growth. It istargeting opportunities arising from the increasing wealth that has beengenerated from greater urbanisation in South Africa coupled with the rapidemergence of a cross cultural middle class. SAPRO is currently focused oninvestments in brownfield and greenfield development opportunities. - The Investment Manager is Proteus Property PartnersLimited and the Investment Adviser is Proteus Property Advisors (Pty) Limited.The Investment Manager and Investment Adviser are responsible for identifyingnew investment opportunities. - The Investment Manager and Investment Adviser are 60%owned subsidiaries of Principle Capital Holdings S.A. (AIM: PCX.L). This information is provided by RNS The company news service from the London Stock Exchange