Friday, 21st October 2005

Listed property loan stock company, Paramount Property Fund (Paraprop), today announced the acquisition of 11 new properties with a total value of R839-million. This takes the size of Paraprop's property portfolio to just under R2-billion and its market cap to over R1-billion.

Paraprop MD, Rodney Squire-Howe, said, "It has been our medium-term objective to grow Paraprop from being one of the smaller funds on the listed property sector to being a 'mid-cap' fund. These acquisitions are an excellent investment and a good mix of office, retail and industrial properties. The investments range from high-profile, blue chip properties to those where we believe we can add some value, to solid long-term lease cash-flow streams."

Squire-Howe added that it was not an easy task to acquire assets in the current active property market and that the team have been working on these for a long time.

"Coincidentally, the deals have all come together over the past few weeks, enabling us to make one big announcement," he added.

The properties include:

• The flagship 24 000m2 office property named The Terraces on Cape Town's popular Bree Street, acquired for R244-million as well as the adjacent office complex, 33 On Bree.
• Lighthouse Mall Shopping Centre in Umhlanga, Kwa-Zulu Natal - a 7 873m2 retail centre with Checkers, Woolworths, Clicks and CNA as major tenants was acquired for R87,5-million. The property is based in a prime location in town.
• Middestad Mall in Bellville - a 21 000m2 retail property, occupied by Shoprite, Markhams, Musica, Diskom and Pep Stores as major tenants.  The Mall caters predominantly to the C and D income groups and is strategically located adjacent to Bellville station.
• Paraprop currently owns the retail portion of the Golden Acre on a sectional title basis, but in terms of the new arrangement, it has now acquired 75% of the Golden Acre office tower, 75% of the adjoining Shoprite building and sold 25% of the retail section, with the result that Paraprop will now own a 75% interest in the combined properties.  This new arrangement of the ownership interests will facilitate significant new development opportunities.
• The well-known Avalon office complex just off Mill Street in Gardens, Cape Town.  This complex has been refurbished and will involve the demolition of certain components of the building in order to improve parking.  The property was acquired for R26,2-million.
• Midas Building in Meadowdale, Johannesburg.  An 18 980m2 complex of industrial and office buildings on a 42 207m2 site with blue-chip group Midas as tenant on an 8 year triple-net lease.  The property is well-located off the N3 freeway in a popular industrial area close to the airport, and was acquired for R110-million.
• The MTN building in Mount Edgecombe, KZN which is an attractive modern office complex of 7 000m2 with MTN as tenant until 2011 was acquired for R72-million.
• Northcliff Shopping Centre is a 5 283m2 shopping centre in a good location in Johannesburg, with Pick 'n Pay, First National Bank, Steers and Spec Savers as major tenants was acquired for R37,9-million.
• DCD Dorbyl portfolio consists of three industrial properties with a total value of R60,7-million, with industrial group DCD Dorbyl as tenant on triple-net leases until 2017.

Says Squire-Howe, "We have sought to maintain Paraprop's exposure to the Cape property market and wanted to increase our exposure to the retail property market. "This tranche of properties achieves exactly that. The geographical breakdown is identical to that of the total fund with 54% of the total new space located in the Western Cape, 26% in Gauteng and 20% in KZN.   In terms of sectoral breakdown 32% of the new space is retail, 38% office and 21% industrial."

With the new acquisitions, Paraprop's total portfolio now comprises 42% office, 30% retail and 21% industrial.

The purchase price was paid in a combination of linked units 50% and debt 50%.

"We were able to place all the linked units in a short space of time due to a high level of demand with many vendors keen to accept units as payment, rather than cash."

"The acquisitions push Paraprop into a new league with a well balanced portfolio, secure earnings' flows with upside potential. We will continue to work the portfolio hard and add value to our properties," Squire-Howe concluded.

ends

For further information, contact: 
Rodney Squire-Howe
Managing Director
Paramount Property Fund 
(021) 659-5945
083-251-9537

Fred Jenkings
Financial Director
Paramount Property Fund
(021) 659-5966
082-495-6902

Issued by:
Nicola Nel
Atmosphere Communications
(021) 461-2117
082-459-2288