Fairvest Property said yesterday that it proposed to dispose of its shares in Indluplace Properties to SA Corporate as a step towards refocusing its portfolio towards lower Living Standard Measure (LSM) and convenience retail.
The group said this followed SA Corporate and Indluplace informing shareholders that they had entered into a scheme implementation agreement where SA Corporate said it intended to acquire the entire issued share capital of Indluplace, excluding treasury shares, for a cash consideration of R3.40 per Indluplace share.
Fairvest said it had decided to vote the 191 581 362 Indluplace shares which it owns in favour of the resolutions. This, it said, meant it would sell all its share in Indluplace to SA Corporate.
"Fairvest’s investment in Indluplace was not strategic, and implementation of the proposed disposal would be a step towards refocusing the Fairvest portfolio towards lower LSM and convenience retail," it said.
Fairvest said on implementation of the proposed disposal, which is subject to the scheme being implemented, the proceeds to Fairvest would amount to R651 million, at R3.40 per share in Indluplace, which Fairvest intends to apply to reducing its unhedged debt, which would result in an approximately 500 basis points reduction in Fairvest’s loan-to-value ratio.
“Fairvest does not expect the proposed disposal to have any impact on Fairvest’s distribution per share guidance for the 2023 financial year,” it said.
Indluplace is a JSE-listed subsidiary of Fairvest which owns a residential property portfolio comprising 9 189 residential units, including student accommodation, and 15 549m² of associated retail space.
The portfolio of 124 buildings, currently valued at R3.3 billion, is situated mainly in Gauteng, with further limited exposure in Mpumalanga and the Free State.
Fairvest holds a portfolio of retail, office and industrial properties.
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