Delta Property Fund Limited has announced the sale of the Lexis Nexis Building. This building is located at 215 Peter Mokaba Road, Morningside, Durban. The buyer is Icebolethu Funerals Proprietary Limited. The sale price is R37.375 million.
Deal Details
Delta has entered into an agreement with Icebolethu Funerals. This agreement involves the disposal of the Lexis Nexis Building. The sale is part of Delta’s strategy to optimize its portfolio.
The net proceeds from the sale are expected to be R32.5 million. These proceeds will be used to reduce the company’s debt. The loan-to-value (LTV) ratio will drop from 60.9% to 60.7%. Additionally, the vacancy levels will decrease from 33.4% to 33.2%.
Purchase Agreement
The sale agreement outlines several key terms:
| Details | Description |
|---|---|
| Purchaser | Icebolethu Funerals Proprietary Limited |
| Sale Price | R37.375 million |
| Deposit | R1.6 million (non-refundable) |
| Balance Payment | R35.775 million secured by guarantees |
| Effective Transfer Date | Approximately 30 September 2024 |
| Approval Timeline | Within 120 days from the signature date |
The deposit of R1.6 million has already been received. The balance is secured by acceptable guarantees. These guarantees are payable on the transfer date.
Conditions Precedent
The disposal is subject to several conditions:
- Payment of the non-refundable deposit.
- Purchaser’s board resolution authorizing the transaction.
- Seller’s board resolution authorizing the transaction.
- Compliance with JSE Listings Requirements and necessary approvals.
Financial and Property Information
The Lexis Nexis Building has a gross lettable area of 3,354m². As of 29 February 2024, the property had a 100% vacancy rate.
| Property Details | Figures |
|---|---|
| Location | 215 Peter Mokaba Road, Morningside, Durban |
| Gross Lettable Area | 3,354m² |
| Weighted Average Rental | R0/m² |
| Net Operating Income (Loss) | R(2.2 million) |
| Vacancy Rate | 100% |
| Valuation | R32.7 million |
| Sector | Office – Other |
The valuation was conducted by Riaan Fourie of CBRE. Fourie is an independent professional valuer.
Rationale and Strategy
Delta’s strategy includes disposing of non-strategic assets. The Lexis Nexis Building fits this category. The proceeds from this sale will help reduce Delta’s debt and improve its LTV ratio.
Terms and Conditions
The effective date of the disposal is anticipated to be around 30 September 2024. This date coincides with the expected registration of the property transfer.
The sale price includes Value Added Tax (VAT) at 15%. The guarantees for the remaining balance must be delivered within 45 days of the agreement’s signature.
Conclusion
Delta Property Fund is executing a strategic disposal of the Lexis Nexis Building. The sale to Icebolethu Funerals is set at R37.375 million. The proceeds will help reduce debt and vacancy rates. The transfer is expected by 30 September 2024. This move aligns with Delta’s strategy to optimize its portfolio.