Further property acquisition

12 Feb 2007 09:00

South African Property Opps PLC12 February 2007 12 February 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 of alarge strategic property investment in South Africa comprising a 42 hectareprominent industrial site in Johannesburg with 150,000 sqm of gross lettablearea (GLA). It is a vacant site with no above ground structures on it. Thesite is situated to the south east of Johannesburg's Central Business Districtadjacent to the main N3 highway which runs between Johannesburg and the port atDurban. It enjoys excellent visibility from and connections to the highway. Key points for the investment: - The development is a joint venture with two partners, one a local contractorand the other a Johannesburg listed property fund. SAPRO will have a 75 percent. interest in the development vehicle. - The development comprises a potential total investment by the joint venturevehicle of £61 million, consisting of an acquisition price of £8 million and anexpected development cost of £53 million. - The joint venture partners plan to service the site and build warehouses anddistribution facilities for industrial users. The site has already beenassigned special zoning and primary rights for industrial and commercial usage,with building heights limited to 3 storeys. The planned development will fallwithin these rights. - The £8 million acquisition price will be paid out of the cash resources of thejoint venture partners (75% (£6 million) to be met by SAPRO). It will bepayable in several tranches as follows: - £4.3 million as the initial down payment - £850,000 which shall be provided by way of a loan facility to the sellers to complete the servicing of the land to enable the joint venture vehicle to be issued with the two certificates (the Section 101 Certificate (relating to provision of electricity, sewerage, water and storm water services to the site) and the Section 82 Certificate (issued once the Section 101 Certificate has been complied with) required before development of the property can commence - £1.425 million on the receipt of the Section 101 Certificate - £1.425 million on the receipt of the Section 82 Certificate. - It is expected that servicing of the land and the issue of the Sections 101and 82 Certificates will be completed within 12 months. The issue of theCertificates will also be subject to an Environmental Impact Assessment which isexpected to be completed within the same timeframe. - It is expected that building will commence in early 2008 and that thebuild-out period will be 3-4 years, although that may be shortened if occupierdemand is strong. - The joint venture vehicle will seek bank financing for the £53 millionbuilding out cost of the development. Brian Myerson, a director of SAPRO, commented: "We are pleased to have securedthis important strategic investment for SAPRO. We have now committed over 25%of the original net issue proceeds in the first three months of operation (whichincluded the Christmas period). We have a very strong pipeline of opportunitiesand remain well on track to be fully invested within the first half of 2007." Further enquiries: SAPRODavid Cooley+44 20 7240 3222 Teather & GreenwoodPaul Fincham+44 207 426 9000 This information is provided by RNS The company news service from the London Stock Exchange