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ARROWHEAD PROPERTIES LIMITED - Forecast financial and property specific information in respect of the proposed acquisition by Gemgrow

Release Date: 08/07/2019 17:07
Code(s): AWA GPA GPB     PDF:  
 
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Forecast financial and property specific information in respect of the proposed acquisition by Gemgrow

ARROWHEAD PROPERTIES LIMITED                               GEMGROW PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)             (Incorporated in the Republic of South Africa)
(Registration number 2011/000308/06)                       (Registration number 2007/032604/06)
JSE share code: AWA ISIN: ZAE000203105                     JSE share code: GPA ISIN: ZAE0000223269
(Approved as a REIT by the JSE)                            JSE share code: GPB ISIN: ZAE0000223277
(“Arrowhead”)                                              (Approved as a REIT by the JSE)
                                                               ("Gemgrow")


FORECAST FINANCIAL AND PROPERTY SPECIFIC INFORMATION IN RESPECT OF THE PROPOSED
ACQUISITION BY GEMGROW OF ALL THE ARROWHEAD ORDINARY SHARES HELD BY ARROWHEAD
SHAREHOLDERS BY WAY OF A SCHEME OF ARRANGEMENT



Shareholders of Arrowhead and Gemgrow are referred to the joint SENS announcements (“announcements”)
released today in respect of, inter alia, the firm intention by Gemgrow to make an offer to acquire all of the
Arrowhead ordinary shares, but excluding the Arrowhead shares held in treasury, from Arrowhead shareholders
(“scheme participants”) by way of a scheme of arrangement (“scheme”) in terms of section 114 of the
Companies Act, No. 71 of 2008, as amended, to be proposed by the board of Arrowhead to scheme participants
(“transaction”) and withdrawal of cautionary announcements. Unless otherwise defined, terms in this
announcement have been defined in the announcements.

1. Forecast financial information

    Set out below are the forecast statements of comprehensive income for Arrowhead (“forecasts”) for the
    6 months ending 30 September 2019 and the year ending 30 September 2020 (“forecast periods”).

    Due to the transaction being classified as a reverse acquisition in accordance with IFRS, Arrowhead is
    regarded as the accounting acquirer that effectively acquires the issued share capital of Gemgrow that it
    does not already own at the effective date. Accordingly, the forecast results presented for the enlarged
    Gemgrow group will be a continuation of the financial results of Arrowhead.

    The forecasts, including the assumptions on which they are based and the financial information from which
    they are prepared, are the responsibility of the directors of Arrowhead and Gemgrow. The forecasts have
    not been reviewed or reported on by reporting accountant in terms of Section 8 of the JSE Listings
    Requirements.

    The forecasts have been compiled in full compliance with Gemgrow’s IFRS compliant accounting policies
    and on an aggregated basis for the Arrowhead property portfolio, with the exception of Indluplace
    Properties Limited, (“Indluplace”) a subsidiary of Arrowhead. On the basis that the forecast financial
    information of Indluplace was not readily available, due to the information being restricted price sensitive
    information, the expected distribution to be received from Indluplace was included in the forecast earnings
    under ‘Listed security’ income and prepared based on the distribution guidance that Indluplace has
    communicated to the market on 9 May 2019.
                                                                                Forecast for    Forecast for
                                                                Notes          the 6 months         the year
                                                                                     ending          ending
                                                                              30 September     30 September
                                                                                       2019            2020
 R'000


 Property rental revenue and recoveries                      3,4,5,6,7,8,19         873 293        1 774 299
 Straight-line rental income accrual                               10                     -                -
 Listed security income                                        16,17,18             103 115          195 431

 Gross property revenue                                                             976 409        1 969 730
 Property expenses                                            9,11,20,21          (330 709)        (697 230)

 Net profit from property operations                                                645 700        1 272 500
 Corporate administrative expenses                                                  (50 037)         (83 086)
 Finance income                                                   12                  36 412           69 809

 Operating profit before finance costs                                              632 075        1 259 223
 Finance charges                                                  13              (242 920)        (478 981)

 Profit before taxation                                                             389 156         780 243
 Taxation                                                                                 -               -
 Profit and total comprehensive for the period/year                                 389 156         780 243



 Total comprehensive income equals distributable earnings.



Forecasts notes and assumptions
The forecasts incorporate the following material assumptions in respect of revenue and expenses that can
be influenced by the directors of Arrowhead:
1.   The forecasts for the six months ending 30 September 2019 and the year ending 30 September 2020
     are based on information derived from lease contracts, information provided by the property manager
     and historic information.
2.   Gemgrow and Arrowhead will not acquire any properties during the forecast periods, however
     properties have been earmarked for disposal within the forecast periods. No revenues or related
     expenditure have been included in the forecast periods past the intended date of sale of each property.
     Per the forecast results presented, the disposal proceeds will be applied in reducing the borrowings of
     Arrowhead and consequently an overall comparable interest saving.
3.   Revenue and recoveries includes rental income and recoveries, of which the portion relating to basic
     rental income amounts to R642.6 million for the six months ending 30 September 2019 and R1.29
     billion for the year ending 30 September 2020.
4.   Contracted revenue is based on existing lease agreements, including stipulated increases, all of which
     are valid and enforceable. 92% of the rental income for the 6 months ending 30 September 2019
     relates to contracted rental income, whilst 7% relates to near contracted rental income and 1%
     uncontracted rental income. Of the rental income for the year ending 30 September 2020, 78% relates
     to contracted rental, 21% relates to near contracted rental income and 1% relates to uncontracted
     rental income.
5.   Leases expiring during the forecast periods have been forecast on a lease-by-lease basis and have
     been assumed to renew at current market rates unless the lessee has indicated its intention to
     terminate the lease.
6.   No new leases have been taken into consideration in the forecasts for the six months ending 30
     September 2019 and year ending 30 September 2020.
7.   Turnover rental (rental income based on the actual turnover of the tenant) has been forecast based on
     management’s income budget in respect of each property.
8.   Current vacant space has been forecast on a property-by-property basis and has been assumed to
     remain vacant for the duration of the forecasts unless a tenant has been identified and a legally binding
     agreement has been finalised.
9.   Property operating expenditure has been forecast by the property manager on a line-by-line basis
     based on management’s review of historical expenditure, where available, and discussions with the
     property manager.
10. No fair value adjustments to investment properties, other than the adjustment as a result of straight-
    line rental accrual has been provided.
11. Head Office administration costs include staff and overhead costs, and have been forecast to increase
    by inflation.
12. Finance income is assumed to be earned at 5.5% per annum over the forecast periods.
13. Existing interest-bearing liabilities of R6.99 billion bear interest at a weighted average rate of 9.8% per
    annum.
The forecasts incorporate the following material assumptions in respect of revenue and expenses that
cannot be influenced by the directors of Arrowhead:
14. The forecasts have assumed no vis majeure (acts of God, riots, political instability).
15. There will be no unforeseen economic factors that will affect the lessee's ability to meet their
    commitments in terms of existing lease agreements.
16. The forecasts have been compiled in full compliance with Gemgrow’s IFRS compliant accounting
    policies and on an aggregated basis for the property portfolio, with the exception of Indluplace, a
    subsidiary (55.7% held) of Arrowhead. Indluplace was not consolidated into the forecast results of
    Arrowhead for the 6 months ending 30 September 2019 and year ending 30 September 2020. On the
    basis that the forecast financial information of Indluplace was not readily available, due to the
    information being restricted price sensitive information, the expected distribution to be received from
    Indluplace was included in the forecast earnings under ‘Listed security income’ and prepared based
    on the distribution guidance that Indluplace has communicated to the market on 9 May 2019.
17. No dividend contribution from Rebosis Property Fund Limited, a company in which Arrowhead has an
    investment (16.4%), has been included in the forecasts.
18. A dividend contribution is forecast to be received from Dipula Property Fund Limited (“Dipula”), a
    company in which Arrowhead has an investment (8.6%), and has been included in ‘Listed security
    income’ in the forecasts based on guidance communicated to the market by Dipula.
19. Consumption based recoveries are consistent with the independent property valuers’ property income
    statements.
20. There are no items of expenditure expected to increase by greater than 15% from historical cost.
21. Material items of expenditure include:
     •    R152 million in electricity, R64 million in rates and taxes, and R37.4 million in salaries in respect
          of the six months ending 30 September 2019; and
     •    R315.6 million in electricity, R131.7 million in rates and taxes, and R58.4 million in salaries in
          respect of the year ending 30 September 2020 (Arrowhead’s short term incentive and long term
incentive, which is subject to remuneration committee approval, is provided for in full within the
last month of the respective financial periods, and is not evenly accrued).
2. Property specific information

   The property specific information required in terms of the JSE Listings Requirements in relation to each of the properties comprising Arrowhead’s property
   portfolio, as at 1 April 2019 is set out below.

   As Gemgrow is currently a subsidiary of Arrowhead, the Arrowhead property portfolio includes the Gemgrow property portfolio.


         Property name              Address                                   Province         Sector           GLA (m2)        Weighted       Valuation (R)
                                                                                                                            average rental
                                                                                                                                   (R/m2)
   1     1 Range Road               1 Range Road, Blackheath                  Western Cape     Industrial         15 450             35.61       62 100 000
   2     1 Sturdee1                 1 Sturdee Avenue, Rosebank                Gauteng          Commercial         13 350           132.71       212 600 000
   3     101 Dorp Street            101 Dorp Street, Pietersburg              Limpopo          Commercial          5 093             70.05       42 900 000
   4     105 Landdros Mare Street   105 Landdros Mare Street, Polokwane       Limpopo          Office                571             95.88        4 600 000
   5     106 Landdros Mare Street   106 Landdros Mare Street, Polokwane       Limpopo          Retail              1 200             81.95        7 050 000
   6     115 Paul Kruger            115 Paul Kruger Street, Pretoria          Gauteng          Commercial          4 080           114.39        49 600 000
   7     127 Bethlehem Street       127 Bethlehem Street, Rustenburg          North West       Commercial          6 997             98.78       61 700 000
   8     135 Pietermaritz Street    135 Pietermaritzburg Street,              Kwa Zulu Natal   Commercial          2 198             57.49       14 400 000
                                    Pietermaritzburg
   9     137 Sivewright             137 Sivewright Street, New Doornfontein   Gauteng          Commercial          4 792             47.48       19 000 000
   10    16 & 18 Forge Road         16 & 18 Forge Road, Erven 99 and 101      Gauteng          Industrial          3 166             34.82       11 200 000
                                    Spartan
   11    18 Thabo Mbeki             18 Thabo Mbeki Street, Polokwane          Limpopo          Commercial          4 288            114.92       40 600 000
   12    20 Trichardt               20 Songozwi Street, Louis Trichardt       Limpopo          Retail              2 017            152.16       28 700 000
   13    249 Commissioner Street    249 Commissioner street, City &           Gauteng          Industrial          1 120             22.94        2 700 000
                                    Suburban,
   14    25 Owl Street              crn Owl Street & Stanley Avenue,          Gauteng          Commercial         14 984             67.45       99 000 000
                                    Auckland Park
   15    31 Nikkel                  31 Nikkel Street, Polokwane               Limpopo          Industrial          2 100             47.90        9 600 000
   16    38 Derrick Road            38 Derrick Road, Spartan                  Gauteng          Industrial          3 846             44.56       18 200 000
   17    38 Prospecton Road         38 Prospecton Road, Isipingo Ext 12       Kwa Zulu Natal   Retail              1 528             81.37       14 500 000
   18    4 Weightman Avenue         4 Weightman Avenue, Empangeni             Kwa Zulu Natal   Retail              4 171             89.03       41 300 000
   19    41 Emerald                 41 Emerald Street, Polokwane              Limpopo          Industrial          1 362             69.28        7 900 000
   20    46 Steel Road              46 Steel Road, Spartan                    Gauteng          Industrial          3 790             47.22       18 200 000
   21    5 Rissik - Polokwane       5 Rissik Street                           Limpopo          Retail                898             94.03        7 600 000
   22    5 Sapphire                 5 Sapphire Street, Polokwane              Limpopo          Industrial          1 840             35.39        4 220 000
   23    51 Schoeman - Polokwane    51 Schoeman Street, Polokwane             Limpopo          Retail              1 196             80.92        7 500 000
   24    54 Agatha                  54 Agatha Street, Arbor Park              Limpopo          Retail              1 405             80.15        7 850 000
   25    54 Jones                   Cnr Phakamile Mabija Road and Currey      Northern Cape    Retail                469            143.91        5 600 000
     Property name                Address                                  Province         Sector       GLA (m2)       Weighted     Valuation (R)
                                                                                                                    average rental
                                                                                                                           (R/m2)
                                  Street, Kimberley
26   54 Schoeman                  54 Schoeman Street, Polokwane            Limpopo          Commercial      2 001           96.76      15 100 000
27   55 Voortrekker               55 Thabo Mbeki Street, Mokopane          Limpopo          Retail          1 408          128.79      19 200 000
28   65 Silikon                   65 Silikon Street, Polokwane             Limpopo          Industrial      1 040           42.60       4 500 000
29   68 Hans van Rensburg         68 Hans van Rensburg Street,             Limpopo          Retail          2 697          104.95      23 500 000
                                  Polokwane
30   70 Landdros Mare             70 Landdros Mare Street, Polokwane       Limpopo          Retail          2 232          108.40      21 900 000
31   71 Biccard                   71 Biccard Street, Polokwane             Limpopo          Retail            877           82.89       6 100 000
32   79 Hans Van Rensburg         79 Hans Van Rensburg Street,             Limpopo          Commercial        875           84.16       8 400 000
                                  Polokwane
33   79 Market                    79 Market Street, Polokwane              Limpopo          Retail          1 322          158.27      19 500 000
34   85 Kruger                    85 Kruger Street, Polokwane              Limpopo          Retail            715          114.85       6 800 000
35   9 Montague Drive             9 Montague Drive, Montague Gardens       Western Cape     Industrial      2 649           61.95      17 200 000
36   908 Hoofweg                  908 Hoofweg (Main) Street, Marble Hall   Limpopo          Retail          1 962           47.76       6 500 000
37   99 Agatha                    99 Agatha Street, Arbor Park             Limpopo          Retail          1 417           63.77       7 750 000
38   Absa Cash Centre             4 Frosterley Crescent, Durban            Kwa Zulu Natal   Commercial      2 359           68.78          27 200
39   Absa Gezina                  Ben Swaart &Voortrekker drive, Gezina    Gauteng          Retail          2 053          102.80      12 000 000
40   Absa Nigel                   Hendrik Verwoerd and 2nd Avenue,         Gauteng          Retail            961           87.56       4 000 000
                                  Nigel
41   Access City                  5 Beacon Road, New Doornfontein          Gauteng          Industrial     24 932           25.59      44 800 000
42   Access Park                  81 Chichester Road, Claremont            Western Cape     Retail         20 481          380.46     864 700 000
43   Alberton Voortrekker Rd      49 & 51 Voortrekker Road, Alberton       Gauteng          Retail          5 099           50.47      28 200 000
44   Allied - Klerksdorp          66 Oliver Tambo Street, Klerksdorp       North West       Retail          1 122           37.63       4 000 000
45   Bears - Northam              Botha Road, Northam                      Limpopo          Retail          2 052          107.16      20 100 000
46   Bedfordview                  4-6 Skeen Boulevard, Bedfordview         Gauteng          Commercial      9 221           57.35      58 700 000
47   Beka Bloemfontein Total      82 Long Street, Hilton                   Free State       Industrial        400           61.76       1 600 000
48   Beka Candela                 Cnr Westview Road and Cor Solomon        Gauteng          Industrial     20 338           76.78     148 600 000
                                  Street, Olifantsfontein
49   Beka Durban                  17 Cordova Place, Briardene Industrial   Kwa Zulu Natal   Industrial       490            38.61       2 100 000
                                  Park
50   Boxer Boksburg               Cnr of Leeupoort Street and Trichardt    Gauteng          Retail          3 678           94.76      41 700 000
                                  Road, Boksburg
51   Bridge on Bond               Corner of Bram Fischer Drive and Bond    Gauteng          Commercial     12 243           62.64      97 800 000
                                  Street, Kensington B
52   Business Centre              8 Gemsbok road, Rivonia                  Gauteng          Commercial      2 926       1888.34ss      25 300 000
53   Cape Town Bellville          73 Willie van Schoor Avenue, Bellville   Western Cape     Commercial      6 344          132.80      71 000 000
     Suntyger
54   Cape Town Bellville Tijger   Tijger Park, Bellville Park, Bellville   Western Cape     Commercial     20 157          138.75     268 000 000
     Park
     Property name                 Address                                    Province         Sector       GLA (m2)       Weighted     Valuation (R)
                                                                                                                       average rental
                                                                                                                              (R/m2)
55   Cape Town Parow               Cnr Fritz Spilhaus Avenue and Jean         Western Cape     Industrial     19 834            40.01     75 800 000
     Industrial Park               Simonis Street, Parow
56   Cape Town Westgate Mall       Cnr Morgenster Road & Vanguard,            Western Cape     Retail         28 951          139.87     371 000 000
                                   Mitchells Plain, Cape Town
57   Checkers Centre Louis         Cnr Songozwi Munnik and Anderson           Limpopo          Retail          7 894          129.33      72 100 000
     Trichardt                     Streets, Louis Trichardt
58   Church Street                 219 Church Street, Pietermaritzburg        Kwa Zulu Natal   Commercial      5 259           68.82      25 900 000
     (Pietermaritzburg)
59   Citizens Building Kimberley   8 - 14 Jones Road                          Northern Cape    Retail            840           76.19       5 300 000
60   Citizens Cape Town            177 Main Road, Cape Town                   Western Cape     Retail          1 480          135.35      25 600 000
61   Clearwater Crossing           Cnr Hendrik Potgieter & Christ, Strubens   Gauteng          Retail         10 092           51.06      63 100 000
                                   Valley, Roodepoort
62   Cleary Park                   Cnr Norman and Middleton Drive, Port       Eastern Cape     Retail         36 294          153.52     565 300 000
                                   Elizabeth
63   Cmh Spartan                   60 Steel Road, Spartan                     Gauteng          Industrial      2 467           36.18       9 800 000
64   Creston                       49 - 53 Forge Road, Spartan                Gauteng          Industrial      6 546           34.35      24 800 000
65   Crownwood Office Park         100 Northern Parkway,Omonde                Gauteng          Commercial     13 347           99.95     141 800 000
66   Danico                        12 Beacon Road, New Doornfontein           Gauteng          Industrial        600           20.29       1 300 000
67   Dept. Of Forestry & Water     2 Hargreaves Avenue                        Eastern Cape     Office          3 790          101.02      35 900 000
68   Diesel Road                   12 - 14 Diesel Road, Isando                Gauteng          Industrial      7 923           26.16      23 600 000
69   Dikai Shopping Centre         Main Road, Hazyview (R40 National          Mpumalanga       Retail          2 923           97.76      22 800 000
                                   Highway Cnr R536)
70   Durban Receiver of            201 Dr Pixley Kaseme Street, Durban        Kwa Zulu Natal   Commercial     23 105          115.48     232 700 000
     Revenue
71   Durban Valley View            24 Otto Volek Road, New Germany            Kwa Zulu Natal   Industrial     30 790           33.95     134 000 000
     Industrial Park
72   East London Vincent Office    59 Western Avenue, Vincent, East           Eastern Cape     Commercial      9 040          118.07      86 000 000
     Park                          London
73   Edufin PE                     3 Sommers Road                             Eastern Cape     Office          3 500           33.09       9 700 000
74   Ellerines - Northam           Botha Road, Northam                        Limpopo          Retail            877           95.48       7 310 000
75   Ellerines Dundee              Cnr Wilson, King Edward & Victoria         Kwa Zulu Natal   Retail          3 518           58.68      21 100 000
                                   Streets, Dundee
76   Ellerines Thohoyandou         Thohoyandou CBD                            Limpopo          Retail            829          102.23       7 900 000
77   Empire Place                  106 Hans van Rensburg Street               Limpopo          Commercial      1 066           87.52       7 300 000
78   F B Motors                    105 & 107 Hans Van Rensburg Street         Limpopo          Office          4 217           65.30      29 800 000
79   Federal Mogul                 41 Anderson Street                         Mpumalanga       Office            900           61.62       4 580 000
80   FNB Building                  22 Jorissen Street, Polokwane              Limpopo          Retail          2 370          134.99      32 200 000
81   Foschini - Kimberley          corner Phakamile Mabija road and Du        Northern Cape    Retail          1 763          105.89      17 300 000
                                   Toits Road, Kimberley
82   Game Centre                   112 & 124 Mphetu Road, Thohoyandou         Limpopo          Retail          7 934          160.44     122 800 000
      Property name               Address                                  Province         Sector       GLA (m2)       Weighted     Valuation (R)
                                                                                                                    average rental
                                                                                                                           (R/m2)
83    Gearmatic                   38 Kruger Street, City & Suburban,       Gauteng          Industrial      1 124            22.48      2 800 000
                                  Johannesburg
84    Geen & Richards             20 Danie Joubert Street, Arbor Park      Limpopo          Retail          1 776           95.45      16 600 000
85    Germiston Meadowdale        Herman Road, Meadowdale, Germiston       Gauteng          Industrial     35 016           50.15     178 000 000
      R24
86    Greytown Shopping Centre    Cnr Sergeant & Oakes Streets,            Kwa Zulu Natal   Retail          5 373           34.87      19 300 000
                                  Greytown
87    Greywies Dry Cleaners       103 Kerk Street, Polokwane               Limpopo          Retail          2 248           79.16      17 400 000
88    Groblersdal Fruit & Veg     2 van Riebeeck Street                    Mpumalanga       Retail          3 980           52.71      18 500 000
      City
89    Hawana Noor Centre          Cnr Songozwi and Krogh Street, Louis     Limpopo          Retail          9 817          136.35     135 100 000
                                  Trichardt
90    Herfred Pietersburg         52 Bok Street                            Limpopo          Retail          2 250           49.56      10 020 000
91    Hi Tech Mini Factories      14 - 16 Gerhardus Street,Strijdom Park   Gauteng          Industrial      2 719           41.67      13 200 000
92    Impala Centre               Cnr Bethlehem and Fatima Bhayat          North West       Retail          3 604          244.04      82 800 000
                                  Street, Rustenburg
93    Jane Furse Crossing         Jane Furse Main Road, Jane Furse         Limpopo          Retail         10 766          158.71     160 000 000
94    Jet Industrial Park         7 Herold Flight Street, Jet Park Ext 5   Gauteng          Industrial     10 209           18.47      20 400 000
95    Jet Phalaborwa              Cnr of Palm Avenue and President         Limpopo          Retail          2 305           73.09      16 000 000
                                  Nelson Mandela Drive, Phalaborwa
96    Jet Potchefstroom           Walter Sisulu Lane, Potchefstroom        North West       Retail          1 636           41.07       5 300 000
97    Jhb - Isle of Houghton      36 Boundary Road, Houghton Estate        Gauteng          Commercial     27 249          110.62     259 500 000
98    Jhb Rosebank 158 Offices    9 Walter Street, Rosebank,               Gauteng          Commercial     19 510          140.13     252 900 000
                                  Johannesburg
99    Jm Investments              1321 Spyker Crescent, Stormill           Gauteng          Industrial      2 700           24.48       7 900 000
100   John Orr - Klerksdorp       53 Oliver Tambo Street, Klerksdorp       North West       Retail            272           85.45       1 800 000
101   Karoo Junction              Cnr Donkin St & Danie Theron, Beaufort   Western Cape     Retail          6 899           45.17      15 700 000
                                  West
102   Kathu Shopping Centre       14 Rietbok Street, Kathu                 Northern Cape    Retail          5 088           92.45      47 000 000
103   Kimberley Building          41 du Toitspan Way,                      Northern Cape    Commercial      1 305           33.04       2 710 000
104   Kimberley Clark             Bevan Road, Erf 587 Wadeville Ext 18     Gauteng          Industrial      6 817           24.87      21 300 000
105   Kimberley Printing          13 Woodley Street,                       Northern Cape    Commercial      1 193           10.00       2 100 000
106   King Williams Town Market   Maclean Street, King William's Town      Eastern Cape     Retail         13 264           71.01     120 500 000
      Sq
107   Klein Brothers              52 - 62 George Street                    Northern Cape    Retail            915           62.91       4 300 000
108   Kolbenco                    6 Liebenberg Street, Alrode              Gauteng          Industrial     12 660           19.10      21 800 000
109   La Rocca                    Corner Main Street and Petunia Street,   Gauteng          Commercial      2 935           75.78      24 400 000
                                  Bryanston
110   Lakeview Terrace            7 Metica Moon Street, Richards Bay       Kwa Zulu Natal   Commercial     13 079           73.48     100 200 000
      Property name               Address                                   Province         Sector       GLA (m2)       Weighted     Valuation (R)
                                                                                                                     average rental
                                                                                                                            (R/m2)
111   Lea Glen                    3 Amanda Avenue,Lea Glen,                 Gauteng          Industrial      3 411            33.95     13 000 000
                                  Roodepoort
112   Longmarket Street Branch    188 Longmarket Street, Pietermaritzburg   Kwa Zulu Natal   Commercial      3 890           63.43      28 800 000
113   Lowveld Lifestyle Centre    Waterval Avenue, Nelspruit                Mpumalanga       Retail         11 170           48.40      62 200 000
114   Lyndhurst Square            Cnr Drome and Pretoria Road, Lyndhurst    Gauteng          Retail          6 352           73.29      53 200 000
115   Lynnwood Botco Place        61 Kasteel Road, Lynwood Glen             Gauteng          Commercial        493           55.97       3 000 000
116   Lynwood - Atrium Building   59 Kasteel Road, Lynwood Glen             Gauteng          Commercial      5 037           39.09      22 000 000
117   Mae West Building           92 Bok Street, Pietersburg                Limpopo          Commercial      2 922          104.56      30 200 000
118   Matsulu Shopping Centre     Corner Madiba Drive and Simunye           Mpumalanga       Retail          6 087          112.68      67 900 000
                                  Street, Matsulu - A
119   Maverick Corner             22 Albrecht Street, Jeppestown            Gauteng          Retail          1 570           81.17      11 900 000
120   McCarthy Centre -           3 End Street, City and Suburban           Gauteng          Industrial      5 935           43.10      24 000 000
      Turffontein
121   MCG Building                33rd Street, Malvern                      Gauteng          Industrial     16 000           43.82      80 200 000
122   Media Shop                  138 Kelvin drive, Sandton                 Gauteng          Commercial      2 522           80.41      22 700 000
123   Melville Properties         7th Street, Mellville                     Gauteng          Retail          1 156          135.64      14 000 000
124   Metcash Welkom              4th 11th Street, Welkom                   Free State       Industrial      6 812           24.77      15 400 000
125   Middelburg SAP              37 SADC Vos Street                        Mpumalanga       Office          3 400           39.59       8 080 000
126   Midrand IBG                 International Gateway Business Park,      Gauteng          Commercial      8 515           95.89      87 800 000
                                  Midridge Park
127   Midtown Mall                Corner Loop and Fatima Bhayat,            North West       Retail         16 721          152.22     239 700 000
                                  Rustenburg
128   Mkuze Plaza                 Main Road                                 Kwa Zulu Natal   Retail          8 535           81.64      65 700 000
129   Montclair Mall              169 Wood Road, Montclair, Durban          Kwa Zulu Natal   Retail         12 652           92.16     153 600 000
130   Monument Mall               9 Voortrekker Road, Krugersdorp           Gauteng          Retail          4 648          100.28      34 000 000
131   Motswedi House              495 Summit Road, Morningside              Gauteng          Commercial      1 630           87.53      16 400 000
132   Nedbank Kimberley           37 Chapel Street,                         Northern Cape    Commercial      1 252           63.11       3 800 000
133   Nelspruit Centre            Cnr Henshall & Anderson Streets           Mpumalanga       Retail          1 060          166.93      16 700 000
134   Nelspruit Ellerines         20 Bester Street                          Mpumalanga       Retail          1 147           85.72       8 800 000
135   Nizams Phalaborwa           Cnr of Palm Avenue and President          Limpopo          Retail          2 263           85.83      18 900 000
                                  Nelson Mandela Drive, Phalaborwa
136   Noor Centre                 Cnr Songozwi Munnik and Krogh Street,     Limpopo          Retail          8 117          128.66      78 000 000
                                  Louis Trichardt
137   North-End                   653 Govan Mbeki Avenue, Port Elizabeth    Eastern Cape     Commercial      1 630          108.05      22 700 000
138   Nu - Payment                2 Kingfisher Crescent, Alberton           Gauteng          Commercial      1 408           38.49      10 100 000
139   Oakhill                     Roos Street, Fourways                     Gauteng          Commercial      1 361          103.88      16 200 000
140   Odendaalsrus Shopping       68 Waterkant Street Cnr                   Free State       Retail          3 683           85.56      37 400 000
      Centre                      Wessel,Odendaalrus
      Property name                Address                                   Province         Sector       GLA (m2)       Weighted     Valuation (R)
                                                                                                                      average rental
                                                                                                                             (R/m2)
141   Ok Klerksdorp                Cnr Delver, Leask & Oliver Tambo          North West       Retail          7 931            19.73     17 600 000
                                   Streets,Klerksdorp
142   Oudehuis Centre              122 Main Road                             Western Cape     Mixed Use       4 182           93.11      31 100 000
143   Parc Du Bel                  19 Strand Street                          Western Cape     Mixed Use       2 299           69.29      14 300 000
144   Perm - Smith Street          343 Smith Street, Durban                  Kwa Zulu Natal   Commercial     10 177           51.34      50 000 000
145   Perm Kimberley               33 du Toitspan Way,                       Northern Cape    Commercial      4 967           49.00      15 100 000
146   Philippi Court               Cnr New Eisleben & Lansdown Roads         Western Cape     Office          1 357          125.27      18 100 000
147   Pinetown Westmead            26–30 Kyalami Road, Westmead,             Kwa Zulu Natal   Industrial     16 914           63.82     103 600 000
      Kyalami Industrial Park      Pinetown
148   Plantation Road 18           18 Plantation Road, Eastleigh             Gauteng          Industrial      3 954           32.76      15 700 000
149   Plantation Road 20           20 Plantation Road, Eastleigh             Gauteng          Industrial      4 209           35.31      17 000 000
150   Propstars                    15 Siemert Road, Doornfontein             Gauteng          Industrial      6 622          127.41      14 000 000
151   Pretoria Hatfield Festival   353 Festival Street, Pretoria             Gauteng          Commercial      5 317           83.65      42 500 000
      Street Offices
152   Pretoria High Court          220 Madiba Street, Pretoria               Gauteng          Commercial     12 093          138.46     147 600 000
      Chambers
153   Pretoria Lynnwood Excel      441 Lynwood Road, Pretoria                Gauteng          Commercial      3 529           86.61      15 000 000
      Park
154   Pretoria Lynnwood Sanlynn    Cnr of Sanlam, Alkantrand and Lynwood     Gauteng          Commercial      8 316           23.68     123 700 000
                                   Streets, Pretoria
155   Pretoria Lynnwood            375 Queen's Crescent                      Gauteng          Commercial      6 412          108.97      45 600 000
      Sunwood Park
156   Pretoria Silverton 22 Axle   22 Axle Street, Silverton                 Gauteng          Industrial      1 817           65.67      11 100 000
      Street
157   Pretoria Silverton 294       294 Battery Street, Silverton             Gauteng          Industrial      5 787           46.61      24 000 000
      Battery Street
158   Pretoria Silverton 301       301 Battery Street, Silverton             Gauteng          Industrial      3 784           56.40      18 500 000
      Battery Street
159   Pretoria Silverton 309       309 Battery Street, Silverton             Gauteng          Industrial      3 770           57.79      20 500 000
      Battery Street
160   Pretoria Silverton 330       330 Alwyn Street, Silverton               Gauteng          Industrial      1 185           46.30       5 150 000
      Alwyn Street
161   Pretoria Silverton 34        34 Bearing Crescent, Silverton            Gauteng          Industrial      5 000           58.75      27 500 000
      Bearing Crescent
162   Pta Eersterust Shopping      Hans Coverdale West Street, Eersterust,   Gauteng          Retail          7 910           52.09      47 000 000
      Centre                       Pretoria
163   Randburg Trevallyn           Cnr River Road and Hyskraan, Randburg     Gauteng          Industrial     32 006           47.02     140 000 000
      Industrial Park              Kya Sands
164   Randburg Tungsten            5 CR Swart Drive, Randburg                Gauteng          Industrial     10 365           49.34      46 700 000
      Industrial Park
165   RCS                          Cnr Voortrekker & Vanguard drive,         Western Cape     Commercial      7 143          105.87      86 100 000
                                   Goodwood
      Property name                Address                                  Province         Sector       GLA (m2)       Weighted     Valuation (R)
                                                                                                                     average rental
                                                                                                                            (R/m2)
166   Rivonia Boulevard            353 Rivonia Boulevard,Edenburg           Gauteng          Commercial      3 708            63.97     19 700 000
167   Roodepoort Robertville       255 Nadine Street, Roodepoort            Gauteng          Industrial     28 226            34.78     90 000 000
      Industrial Park
168   Rosettenville Junction       592 Geranium Street, Rosettenville,      Gauteng          Retail         14 198           61.10      67 200 000
                                   Johannesburg
169   Sandton Bryanston            Cnr William Nicole Drive, Grosvenor      Gauteng          Retail          4 585          119.88      64 100 000
      Grosvenor Shopping           Road and Main Road, Bryanston
      Centre
170   Sandton Bryanston St         Sloane Street, Bryanston                 Gauteng          Commercial     10 184           81.85      95 900 000
      Andrews Complex
171   Sandton Hyde Park 50         Cnr 6th Avenue and 1st Road, Hyde        Gauteng          Commercial      4 110          141.88      59 100 000
      Sixth Road                   Park
172   Sandton Rivonia 36           36 – 38 Homestead Street, Rivonia        Gauteng          Commercial      2 410           96.52      24 900 000
      Homestead Road
173   Sandton Sunninghill Place    11 Simba Road, Sunninghill               Gauteng          Commercial      8 139          112.39      84 700 000
174   Sanlam Centre Vryburg        70 Market Street                         Northern Cape    Retail          1 905          107.06      16 800 000
175   Saps - Mitchell's Plain      Alpha Street, Mitchells Plain            Western Cape     Commercial      3 416           46.72      17 300 000
176   Saps Worcester               28 Fairbairn Street, Worcester           Western Cape     Commercial      3 848           79.60      32 700 000
177   Sasol Gas                    272 Kent Avenue, Ferndale                Gauteng          Commercial      2 526           95.34      23 100 000
178   Selby Building               106 Booyens Road, Selby                  Gauteng          Commercial     16 346           52.74      74 700 000
179   Shoprite Boksburg            262 Commissioner Street, Boksburg        Gauteng          Retail          3 034           79.71      25 300 000
180   Shoprite Brakpan             Cnr Kitzinger, Kingsway Avenue and       Gauteng          Retail          6 954           43.12      34 400 000
                                   Park Street, Brakpan, Brakpan
181   Shoprite Louis Trichardt     Cnr Kruger Devenish and Burger Street,   Limpopo          Retail          8 263           92.02      66 100 000
                                   Louis Trichardt
182   Sibasa Shopping Centre       R524, Miluwani                           Limpopo          Retail          4 102          104.25      39 200 000
183   Simgold                      Bunsen Road, Industria                   Gauteng          Industrial     16 573           14.35      25 700 000
184   Simunye Shopping Centre      R40 National Highway                     Mpumalanga       Retail          6 538           51.35      28 600 000
185   Spark Schools                Cnr Kruger & Market Streets, City &      Gauteng          Industrial      6 278           28.67      19 800 000
                                   Suburban
186   Star Foods                   2 Cardiff Road, Pietermaritzburg         Kwa Zulu Natal   Industrial      3 114           45.42      15 700 000
187   Sterkspruit Boxer Shopping   60 Main Street, Sterkspruit              Eastern Cape     Retail          6 385          115.97      66 000 000
      Centre
188   Tarry's Head Office          Cnr La Rochelle & Crystal Roads,         Gauteng          Industrial     10 824            4.98       5 800 000
                                   Stafford
189   Taung Forum                  Station Road, Taung                      Northern Cape    Retail         10 231           86.20      95 000 000
190   The Arches                   7 Taylor Street                          Eastern Cape     Mixed Use       2 707          112.69      23 000 000
191   The Crossing                 Cnr Grobler and Grimm Streets, Fauna     Limpopo          Retail          1 393          150.06      17 200 000
                                   Park
192   The District                 8 Kikuyu Road, Sunninghill               Gauteng          Commercial      3 888          111.94      33 000 000
         Property name                  Address                                      Province           Sector               GLA (m2)          Weighted         Valuation (R)
                                                                                                                                           average rental
                                                                                                                                                  (R/m2)
193      The Main Change                20 Kruger Street, City & Suburban            Gauteng            Commercial               5 268              53.58          29 400 000
194      The Pond Shopping Centre       James Crescent, Halfway House Ext 17         Gauteng            Retail                   5 501              51.98          34 800 000
195      The Terminus Shopping          1287 Embarkment Street, Klerksdorp           North West         Retail                  11 377              73.60          95 600 000
         centre
196      Theo's Building - Brits        40A Murray Avenue, Brits                     North West         Retail                   2 122               69.99         11 200 000
197      Thohoyandou Centre             Central Business District, Thohoyandou       Limpopo            Retail                   4 006               69.25         32 700 000
198      Thohoyandou Centre             Thohoyandou CBD                              Limpopo            Retail                   2 723              160.83         40 100 000
199      Thohoyandou CBD                Thohoyandou CBD                              Limpopo            Retail                   4 359               93.54         37 100 000
200      Thompsons Building             95 Munnik Street, Louis Trichardt            Limpopo            Retail                   3 727              112.54         31 900 000
201      Town Centre Boksburg           95 Leeupoort Street, Boksburg                Gauteng            Retail                   6 883               35.83         27 300 000
202      Trador                         6 Kobalt Street, Polokwane                   Limpopo            Industrial              15 001               39.44         46 700 000
203      Transforum Centre              Cnr Nelson Mandela & Bethlehem Drive,        North West         Retail                   4 777              355.86        173 300 000
                                        Rustenburg
204      Transwire                      28 Main Street, Clayville                    Gauteng            Industrial               6 500               34.21         23 200 000
205      Truworths Corner               Cnr Symphony Way & Minuet Lane,              Western Cape       Retail                     520              250.38          9 200 000
                                        Units 1 & 2 Truworths Corner
206      Tsolo                          Main Road,Tsolo                              Eastern Cape       Retail                   4 097               79.88         34 000 000
207      Urban Brew Building            Cnr Harley & Surrey Avenue, Ferndale         Gauteng            Commercial               9 804              111.00        116 600 000
208      Vereeniging Voortrekker        Cnr Voortrekker Street and Kruger            Gauteng            Retail                   2 539               61.37         16 800 000
         Str                            Avenue, Vereeniging
209      Virgin Active Benoni           8 Pioneer Road, Kleinfontein Lake            Gauteng            Industrial               3 154               90.62         22 000 000
210      Waterworld                     234 Malibongwe Drive, North Riding           Gauteng            Industrial               6 524               54.46         39 300 000
211      Wilcon House                   24 Fabricia Road, Fabricia                   Northern Cape      Commercial               2 659              130.55         30 100 000
212      Wonderboom Carvenience         Cnr Lavender & Braam Pretorius, Annlin,      Gauteng            Retail                  10 526               86.41         70 300 000
         Centre                         Pretoria North
                                                                                                                                                              10 879 620 000

Notes:

1.       This property is occupied by Arrowhead and Gemgrow.
2.       The properties in the table above have been valued as at 1 April 2019 by Rowan Collins of Yield Enhancement Solutions and Theuns Behrens of Real Insight, who
         are independent external registered professional property valuers in terms of Section 13 of the JSE Listings Requirements and whom are both registered as a
         professional valuer in terms of the Property Valuers Profession Act, No 47 of 2000.
3.       Gemgrow is acquiring all of the issued shares of Arrowhead in terms of the scheme and the scheme consideration will be settled in so many Gemgrow B shares as
         determined in terms of the swap ratio. No purchase price has been attributed to the Arrowhead property portfolio or individual properties within the Arrowhead property
         portfolio. The effective date of the transaction is the date on which the scheme becomes unconditional.
4.       The Gemgrow and Arrowhead consolidated investment property value as at 31 March 2019 was R11 243 305 203. Subsequent to 31 March 2019 the Gemgrow and
         Arrowhead property portfolio have been externally valued to R10 879 620; translating to a R363 685 203 (3.23%) decrease in the direct property value.
8 July 2019




Corporate advisor and sponsor to Arrowhead
Investec Bank Limited

Independent corporate advisor and transaction sponsor to Gemgrow
Nedbank Corporate and Investment Banking, a division of Nedbank Limited

Corporate advisor to Gemgrow
Investec Bank Limited

Strategic transaction advisor to Arrowhead
Ferryman Capital Partners

Legal advisor and competition lawyers
Cliffe Dekker Hofmeyr Incorporated

Reporting accountants
BDO South Africa Incorporated

Independent expert to Gemgrow
Questco Corporate Advisory Proprietary Limited

Independent expert to Arrowhead
Mazars Corporate Finance Proprietary Limited

Independent property valuers
Yield Enhancement Solutions Proprietary Limited
Real Insight Proprietary Limited

Date: 08/07/2019 05:07:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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