A proposal for the purchase of a share in the Villa Mall
THE MAJOR SHAREHOLDER in the company owning the centre and to be developing the centre contacted me recently and told me he was interested in selling a 30% interest in the property at a 12% return. I believe I’ll be able to negotiate an agreement whereby:
The buying price for the interest will be R1,14bn. Your fund will receive an amount of R11,4m/month each and every month, the first payment being made on the 31st day after the amount of R1,14bn was received by Capicol and each subsequent monthly payment shall be on the same date of the month.
The monthly payment referred to above will escalate at a rate of 8%/ year.
On the sale of the property to a third party, your fund will receive the greater amount of the sum equivalent to R1,14bn compounded at the rate of 8%/year from the date of purchase of the 30% interest and the date of transfer of the property on its sale to a third party or 30% of the final purchase price. The seller has assured me he has 180 tenants signed, with signed leases. As previously discussed, the majority of the tenants are international financially stable franchisors who will not rely on the viability of the leased premises in order to pay the rent. Each lease is on average 100 pages long and all the leases are available for perusal by an interested investor at the seller’s offices.
It’s not surprising you have received negative reports on the development, because most institutional property owners don’t have the guts to undertake such a major development; nor do they have the ability and vision to envisage a 90 000m sq development. Most of the major property owners in Pretoria are jealous and fearful this development will adversely affect their centres and are therefore spreading false rumours to the detriment of the development so that they can protect their investments and their corporate positions.
It’s my considered opinion the above proposal is a sound investment that requires serious consideration on your part. Should you wish to pursue this matter further it would be greatly appreciated if you could forward an offer to purchase for the interest, giving all the terms and conditions you’d require to be incorporated into the agreement of sale for the protection of your interest in the property.