A pro­posal for the pur­chase of a share in the Villa Mall

Finweek English Edition - - MONEY CLINIC -

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.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.