In line with the group’s updated strategy of investing across the broader European market, shareholders are advised that MAS has, through a subsidiary, PKM CEE Investments Limited, signed a sale and purchase agreement to acquire, from Piccadilly Capital Investment sp. Z o.o., the Nova Park mall in Gorzów Wielkopolski, Poland.
MAS’ effective economic interest in the acquisition is the equivalent of an 80% direct participation in the performance of the mall and a 20% participation at the weighted average cost of funding achieved by the acquisition
Rationale and Salient Terms of the Acquisition
The purchase price payable for the acquisition is EUR 88,5 million, with a cash deposit of EUR 8,85 million paid within three business days of the signature of the SPA and held in escrow. The purchase price will be paid to the vendor in full on the day preceding the conclusion of final transaction agreements (namely, once the SPA has become unconditional).
Nova Park is situated in central Gorzów, 150km from Berlin in western Poland. The mall’s current lettable area of 32,580 square metres and 910 parking spaces make it the largest mall in the region. The mall has an estimated catchment of 370,000 people and has been experiencing growing footfall and growing tenant revenues since its opening in 2012. The current annual rent roll of approximately EUR 5,8 million is generated from a diversified mix of high quality tenants including international and national brands Bershka, C&A, CCC, Cropp Town, Deichman, Douglas, Empik, H&M, Intersport, KFC, Media Expert, Mohito, New Yorker, Piotr i Pavel, Pull&Bear, Pure Fitness, Reserved, Rossmann, Sephora, Sinsay, Smyk, Stradivarius and Super-Pharm. The weighted average rental per square metre is EUR 14,40 per month.
Nova Park benefits from excellent visibility and accessibility due to good road and public transport connections and its location within a short walking distance from the city centre of Gorzów. In addition to the immediate income being generated from the property, the acquisition provides significant opportunities to enhance the income stream and strengthen the mall’s dominance through active asset management and a substantial extension of approximately 6,800 square metres, aligning with the group’s strategy of delivering a growing income distribution.
The SPA contains standard terms and warranties for a transaction of this nature.
The purchase price reflects the fair value attributed to the mall, as at 17 November 2016, by the directors of MAS. The directors of MAS are not independent or registered as professional valuers or professional associate valuers in terms of the South African Property Valuers Profession Act 2000 or otherwise.
The acquisition is categorized as a Category 2 transaction in terms of the JSE Listings Requirements.
Conditions Precedent
In line with local policy, pre-emption rights exist in favour of the local municipality. The pre-emption rights expire in 30 days from the date of signature of the SPA, after which the acquisition will become unconditional, final transaction agreements governing the closing and implementation of the acquisition will be concluded and the acquisition will be effective.
Co-Investment Agreement with Prime Kapital
The acquisition has been undertaken in terms of a long-term co-investment agreement that MAS has entered into with Prime Kapital Limited (respectively, “Prime Kapital” and “the co-investment agreement”). All future acquisitions made under this co-investment agreement shall result in the same effective economic interest for MAS as stated above.
Prime Kapital have sourced and will manage this and future acquisitions going forward under the co-investment agreement.
Withdrawal of Cautionary Announcement
Shareholders are advised that the cautionary announcement dated 3 October 2016 is now withdrawn and shareholders are no longer required to exercise caution when dealing in MAS shares. MAS is dual primary listed on the Main Board of the JSE and the Euro MTF market of the LuxSE.
