Agreements have been entered into with Arrow Creek Investments (“Arrow Creek”), to dispose of trading joint ventures and secondary grade properties, and, with Rand Merchant Bank Pension Fund (“RMB”) to acquire a large, high-grade investment property.
The agreement with Arrow Creek, valued at R358,3 million plus third party debt, includes the disposal of a portfolio of properties, plus Redefine’s interest in a number of trading joint ventures (such as the Oasis Retirement Resort and Brickfield Joint Venture) as well as the Upper East Side Hotel.
The effective date of the Arrow Creek transaction is 31 August 2011, subject to a number of suspensive conditions being met.
The purchase consideration will be settled by Arrow Creek through a combination of cash, the assumption of third party debt and an interest bearing vendor loan repayable within 24 months.
Marc Wainer, Chief Executive of Redefine, confirms that the cash proceeds from the transaction will be used by Redefine in the long term, to acquire high-grade investment properties, and in the short term, to reduce interest-bearing borrowings.
Redefine, following a tender process, will acquire a prime property located at 155 West Street, Sandton from RMB for R510 million, with a five-year, fully maintaining and repairing lease with Discovery Health Limited, escalating at 8% per annum. The initial yield is just over 8%. The transaction is subject to Competition Commission approval.
“The building, which is part of the Discovery Health complex, measures 24,500 sqm (GLA) with 1,254 parking bays and fits perfectly with Redefine’s strategy of investing in high-quality, single tenanted buildings in prime locations. We are well on track in the restructuring of Redefine’s core property portfolio,” concludes Wainer.
