BCX offloads properties
BCX said the deal enabled it to settle its outstanding debt on the properties, while retaining about R130m in cash, and being able to restructure its rental terms on a more commercially efficient basis.
The better rental terms would enable it to improve cash flows on a monthly basis, BCX said.
Had the transaction taken place by the end of November last year, it would have pushed up headline earnings a share by 4.4% to 22.5c a share, and the group’s net asset value by 5.2% to 495.8c a share, Business Connexion said by way of illustration.
Business Connexion shares were 1.1% lower at 819c a share by Thursday afternoon against the backdrop of a weak overall market.
Adding properties
For Growthpoint, the deal means adding 8 ‘Grade A’ commercial properties with total lettable space of 48 065 square metres, to its portfolio.
Growthpoint said the acquisition reaffirmed its stated objective of investing in "quality, diversified physical property assets that are underpinned by long term, sustainable, escalating income streams".
But, because the acquisition only increased the size of its asset base from R11.5bn to R11.9bn, the deal would not have a material impact on its forecast distributions or net asset values, Growthpoint said.
Its shares were 4.5% down at R11.70 by early Thursday afternoon.
The properties are situated in Midrand, Menlyn in Pretoria, La Lucia in Durban, Montague Gardens in Cape Town and St George’s Park in Port Elizabeth.
Business Connexion is the only tenant in six of the eight properties, but has provided Growthpoint with rental guarantees for the other two, multi-tenanted buildings for a year.
Source: Fin24
Loading ...