INDUSTRIALS REIT LIMITED

Transaction in Own Shares • Jul 19, 2018

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RNS Number : 0880V

Stenprop Limited

19 July 2018

STENPROP LIMITED

(Registered in Guernsey)

(Registration number 64865)

LSE share code: STP    JSE share code: STP

ISIN:  GG00BFWMR296

("Stenprop" or the "Company")

DISPOSAL OF SEVEN SWISS PROPERTIES

19 July 2018

1.   INTRODUCTION

Shareholders are advised that, on 17 July 2018, Stenprop completed the disposal of two of its Swiss properties, Altendorf and Arlesheim, via the sale of the entire issued share capital of Polo Property GmbH ("Polo Property"), a wholly-owned indirect subsidiary of Stenprop, to Helvetica Swiss Commercial AG, a wholly owned subsidiary of Helvetica Swiss Commercial Fund ("HSC") a real estate fund focused on Swiss property regulated by the Swiss Financial Market Supervisory Authority FINMA and managed by Helvetica Property Investors AG, Zurich, licensed and regulated by FINMA as its Fund Manager Swiss fund (the "Purchaser").

Shareholders are further advised that three subsidiaries of Stenprop also entered into agreements for the disposal of five additional Swiss properties, being Baar, Vevey, Montreux, Chiasso and Sissach, as asset sales to the Purchaser. The aggregate consideration for these disposals is CHF76.35 million (£58.73[1] million) (the "Consideration"), to be settled in cash. The combined transactions value the seven properties at CHF103.65 million (£79.73 million) compared with the valuation at 31 March 2018 of CHF103.23 million (£79.41 million).

2.   RATIONALE FOR THE DISPOSAL

Stenprop has previously announced its intention to become a specialised UK multi-let industrial ("MLI") REIT and, over the next few years, to sell substantially all of its non-MLI assets and utilise the sale proceeds to build a focused UK MLI business. It has also previously announced its intention to dispose of its Swiss portfolio in line with this strategy.

3.   TERMS OF THE DISPOSAL

The sale and purchase agreement for the disposal of Polo Property was signed and simultaneously closed on 17 July 2018 (the "Polo SPA").

The asset disposals of Baar, Vevey, Montreux, Chiasso and Sissach are subject to individual and separate sale and purchase agreements (the "SPAs"). The Vevey and Montreux SPAs closed on 18 July 2018.  The Baar and Sissach SPAs became unconditional on 18 July and are expected to close on 19 July 2018 or shortly thereafter.

The Chiasso SPA remains subject to the release of security by the lender, and is expected to become unconditional and close shortly. Failure to close before 30 September 2018 will result in termination of the Chiasso SPA.   

The total consideration for Baar, Vevey, Montreux, and Sissach is CHF57.55 million (£44.27 million).  The consideration for Chiasso is CHF9.40 million (£7.23 million). The total consideration for the shares in Polo Property is CHF9.40 million (£7.23 million), which is subject to a potential post-completion adjustment based on Polo Property's audited financial statements at 30 June 2018.

Stenprop has provided a surety undertaking for the obligations of its subsidiaries under the Polo SPA and the SPAs, limited to a total value of CHF6 million (£4.6 million). Normal warranties and indemnities for transactions of this nature have been provided by the relevant subsidiaries of Stenprop.

4.   PROPERTY SPECIFIC INFORMATION

Property name	Geographic location	Sector	GLA (m2)	Weighted average rental per square metre (CHF m2)	Valuation (CHF'000)	Consideration (CHF'000)	Net profits attributable to the properties for the year ended 31 March 2018 (CHF)
Baar	Oberdorfstrasse 2, 6340 Baar	Retail	3 995	371	20,430	22,700	1,059,133
Vevey	Place de la Gare 5, 1800 Vevey	Mixed-use	1 506	212	5,900	5,900	93,616
Montreux	Grand Rue 3, 1820 Montreux	Mixed-use	4 198	291	25,290	24,500	590,839
Chiasso	Via Livio 1, 6830 Chiasso	Office	4 183	150	8,650	9,400	302,837
Sissach	Gelterkinderstrasse 30, 4450 Sissach	Retail	1 694	130	3,820	4,450	(11,101)
Altendorf	Zurcherstrasse 104, 8852 Altendorf	Retail	8 228	196	26,450	25,200*	1,022,818
Arlesheim	Fabrikmattenweg 2-4, 4144 Arlesheim	Mixed-use	4 834	218	12,690	11,500*	674,920
Total CHF			28,638	228	103,230	103,650	3,733,061
Total GBP			28,638	176	79,408	79,731	2,871,585

* The consideration shown in the table above for the properties Altendorf and Arlesheim is the gross consideration paid for them. The net consideration paid for the shares of Polo Property after taking into account debt, deferred tax and other net current assets was CHF9.4 million.

The value attributable to the properties was determined in accordance with Royal Institution of Chartered Surveyors standards by Roger Meeds, a director of Jones Lang LaSalle Limited, who is an external valuer registered with the Royal Institution of Chartered Surveyors. These valuations were reflected in Stenprop's consolidated statement of financial position at 31 March 2018. 

5.   CATEGORISATION OF THE DISPOSALS

The combined transactions are classified as a category 2 transaction in terms of the JSE Listings Requirements. Accordingly, it is not subject to approval by shareholders.

Stenprop was advised by CBRE Switzerland, McCafferty Asset Management AG and Walder Wyss Ltd.

For further information:

Stenprop Limited                                                                                   +44(0)20 7079 6600

Paul Arenson

Patsy Watson

Julian Carey

Numis Securities Limited (Financial Adviser)                                   +44(0)20 7260 1000

Hugh Jonathan

Vicki Paine  

Tavistock (PR Adviser)                                                                          +44(0)20 7920 3150

James Whitmore

James Verstringhe

Kirsty Allan

Instinctif Partners (SA Investor Relations and PR Adviser)            +27 (0)11 447 3030

Keagile Makgoba

Java Capital Trustees and Sponsors Proprietary Limited               +27 (0)11 722 3050

(JSE sponsor)

About Stenprop:

Stenprop is a Guernsey-registered UK REIT. The objective of the Company is to deliver sustainable growing income to its investors. Stenprop's investment policy is to invest in a diversified portfolio of UK multi-let industrial (MLI) properties with the strategic goal of becoming the leading MLI business in the UK. For further information, go to www.stenprop.com.

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[1] An exchange rate of £1:CHF1.30 has been used in this announcement

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