South Africa’s Vikule Property acquires Spanish retail parks for €193m

South African listed real estate group Vikule Property announced that Castellana Properties SOCIMI SA , a Spanish REIT which at the time of implementation of the transaction will constitute a 98.3% subsidiary of Vukile, has exchanged and completed contracts with Redevco Iberian Ventures I.S.L (“the seller” or “Redevco”) to purchase 100% of the equity in eleven property owning companies (more fully detailed in paragraph 3 below (being “the property companies”)) that own a portfolio of retail parks located throughout Spain (“the portfolio”) for an aggregate base purchase consideration of EUR193 million.

The base purchase consideration is subject to potential adjustment based on movements in the net asset value of the property companies as at 30 June 2017 (the “effective date”) which is anticipated to result in an upward adjustment of c.EUR2.5 million to adjust for additional net asset value of the property companies as represented mainly by cash on hand as at the effective date. Castellana has procured debt funding of EUR94.8 million by way of loans from Spanish lenders secured over the portfolio (with no recourse to Vukile or Castellana), at an all-in cost of debt of 1.98%. The remaining c.EUR98.2 million of the purchase consideration plus c.EUR5.1 million of anticipated acquisition costs will be funded by Vukile via Castellana from internal cash resources and available facilities.

Each property comprising the portfolio is owned by a separate wholly owned subsidiary of the seller as follows:

Entity Property
Redevco Villaneuva I, S.L.U. Retail Park La Serena (Villanueva I)
Redevco Villaneuva Fase2, S.L.U. Retail Park La Serena (Villanueva II)
Redevco Merida, S.L.U. Retail Park La Heredad (Mérida)
Redevco Caceres, S.L.U. Retail Park Mejostilla (Cáceres)
Redevco Motril, S.L.U. Retail Park Motril (Motril)
Redevco Granada, S.L.U. Kinépolis Leisure Centre (Kinépolis LC) and Kinépolis Retail Park (Kinépolis RP)
Redevco Castellon, S.L.U. Ciudad del Transporte
Redevco Huelva, S.L.U. Retail Park Marismas Del Polvorín (Huelva)
Redevco Parque Principado, S.L.U. Retail Parque Parque Principado (Parque Principado)
Roxbury Spain, S.L.U. Retail Park Parque Oeste de Alcorcón (Alcorcón R.P.)
Randolph Spain, S.L.U. Retail Park Parque Oeste de Alcorcón (Alcorcón M.M.)

The portfolio has been acquired on an unconditional basis with effect from the effective date. The purchase price was paid in cash on the effective date.

Post the transaction Vukile will own 98.3% of the equity in Castellana with the remaining equity being held by a corporatestructure representing the interests of the Morze family.

Normal warranties and undertakings for a transaction of this nature have been obtained. Apart from certain warranties in respect of certain administrative and tax compliance issues in relation to certain properties and/or the property companies (in respect of which the seller remains liable for settlement of any resultant claims), Castellana will rely on warranty and indemnity insurance underwritten by Ambridge Europe Limited to recover any financial claims arising from any contractua claims.

Source: Vukile Property

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