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Acquisition of 75% Interest in KPI and Distribution of Circular in terms of Sec 60 of the Companies Act
HERIOT REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2017/167697/06)
(Approved as a REIT by the JSE)
JSE share code: HET
ISIN: ZAE000246740
("Heriot" or "the Company")
ACQUISITION OF 75% INTEREST IN KATLEHO PROPERTY INVESTMENTS PROPRIETARY LIMITED AND DISTRIBUTION OF CIRCULAR IN TERMS OF SECTION 60 OF THE COMPANIES ACT
1. INTRODUCTION
1.1 Shareholders are hereby advised that the Company has entered into exchange agreements in terms of
section 42 of the Income Tax Act, No. 58 of 1962 ("the Agreements") with Heriot Investments
Proprietary Limited ("Heriot Investments") and Gabenjosh Investments Proprietary Limited
("Gabenjosh"), in terms of which the Company will acquire 2 700 ordinary shares in Katleho Property
Investments Proprietary Limited ("KPI"), representing 67.5% of the issued share capital of KPI, from
Heriot Investments and 300 ordinary shares in KPI, representing 7.5% of the issued share capital of
KPI (collectively the "KPI Shares") from Gabenjosh, in exchange for 5 605 050 ordinary shares in
the Company ("Consideration Shares") ("the Acquisitions").
1.2 Heriot Investments is a material shareholder of Heriot, holding circa 89.07% of the issued share capital
of the Company (prior to the Acquisitions). Heriot Investments is 100% owned by The Gusi Trust, a
trust of which Steven Herring, a director of the Company, and his family are beneficiaries and is a
related party of Heriot in terms of paragraph 9.1(a) of the JSE Listings Requirements. Gabenjosh is an
entity that is ultimately controlled by the Herring Family Trust, a trust of which Richard Herring, a
director of the Company, and his family are beneficiaries and is a related party of Heriot in terms of
paragraph 9.1(a) of the JSE Listings Requirements.
2. DETAILS OF THE BUSINESS OF KPI
KPI is a South African property investment company that owns a portfolio of income-producing
commercial properties leased to a diversified tenant base. Its principal business is the ownership,
management and leasing of commercial real estate, generating rental income from these assets.
3. RATIONALE FOR THE ACQUISITIONS
The rationale for the Acquisitions are consistent with the Heriot group's primary objective of exploring
strategic opportunities to grow and streamline its asset base by acquiring high-yielding properties. The
Acquisitions have been concluded at a 20% discount to KPI's agreed net asset value and will therefore be
immediately accretive to Heriot shareholders.
4. SALIENT TERMS OF THE ACQUISITIONS
4.1 Effective Date
The Acquisitions will become effective on 30 June 2026 ("Effective Date"), subject to the fulfilment
or waiver, as the case may be, of the suspensive conditions in paragraph 4.2.1 below by no later than
the Effective Date (or any extended date agreed between the parties).
4.2 Suspensive Conditions
4.2.1 The Acquisitions are subject to the fulfilment or waiver of the following remaining suspensive
conditions ("Suspensive Conditions") by no later than 30 June 2026 (unless extended by the
parties):
4.2.1.1 all shareholder approvals required in terms of the Companies Act No 71 of 2008 ("Companies
Act") to implement the Agreements being obtained; and
4.2.1.2 all regulatory approvals required for implementation of the Acquisitions being obtained.
4.3 Purchase Consideration
4.3.1 The purchase consideration for the Acquisitions is the amount of R128 916 150, which will be
settled through the issuance of the Consideration Shares to Heriot Investments and Gabenjosh, at
an issue price of R23.00 per share, on the Effective Date.
4.3.2 The Consideration Shares shall be issued as follows -
4.3.2.1 5 044 545 of the Consideration Shares will be issued to Heriot Investments; and
4.3.2.2 560 505 of the Consideration Shares will be issued to Gabenjosh.
4.4 Other significant terms of the Agreements
The Agreements contain limited warranties by Heriot Investments and Gabenjosh in favour of the
Company that are customary for transactions of this nature.
5 DETAILS OF KPI'S PROPERTY PORTFOLIO
The property portfolio of KPI comprises the following properties:
Property Location Sector Gross Weighted Fair value
Name lettable area average gross attributable to
(m²) rental (m²) the property
238 Roan Gauteng Office 9 035 R106.20 R116 250 000
Crescent
Infinity Office Gauteng Office 12 940 R220.99 R152 000 000
Park
Meyersdal Gauteng Office 4 991 R118.72 R50 000 000
Office Park
Notes:
1. No additional property-related expenditure was incurred by the Company in connection with the Acquisitions.
2. The properties were externally valued by Peter Parfitt of Quadrant Properties Proprietary Limited, who is
registered as a professional valuer in terms of section 19 of the Property Valuers Profession Act, No. 47 of
2000, and is an independent valuer as such term is contemplated in the JSE Listings Requirements. The
valuation framework applied was the discounted cash flow method, which discounts future income streams and
accounts for expected rental and expense growth rates, vacancies, and costs not recoverable from tenants. The
discounted cash flow valuations are tested for reasonableness by benchmarking against recent comparable sales
activity and available market surveys and comparing the discounted cash flow values to the capitalised cash
flow values. The capitalised cash flow values are calculated by applying appropriate capitalisation rates to the
properties' future earnings potential. The capitalisation rates depend on several factors, such as location, the
property's condition, lease covenants, and current market conditions.
6 FINANCIAL INFORMATION RELATING TO KPI
In terms of the latest unaudited management accounts of KPI, as at 31 May 2026, the net asset value of
KPI amounted to R209 522 561 (two hundred and nine million five hundred and twenty two thousand
five hundred and sixty one Rand), while the attributable profit before taxation of KPI for the rolling
twelve months ended 31 May 2026 amounted to R42 772 347 (forty two million seven hundred and
seventy two thousand three hundred and forty seven Rand).
Shareholders should note that the above financial information has been extracted from the unaudited
management accounts of KPI. The Company is satisfied with the quality of the unaudited management
accounts of KPI.
7 CATEGORISATION OF THE ACQUISITIONS
The size of the Acquisitions are below the threshold for them to be considered to be small-related party
transactions or transactions that require shareholder approval in terms of the JSE Listings Requirements.
8 DISTRIBUTION OF CIRCULAR IN TERMS OF SECTION 60 OF THE COMPANIES ACT
8.1 Despite no shareholder approval being required in terms of the JSE Listings Requirements, section
41(1) of the Companies Act requires an issue of shares to be approved by a special resolution of the
shareholders of a company if the shares are issued to, inter alia, a person related or inter-related to the
company, or to a director or prescribed officer of the company. As the Consideration Shares will be
issued to persons that are related or inter-related to the Company, or to a director or prescribed officer
of the Company, the issue of the Consideration Shares is required to be approved by shareholders by
way of a special resolution passed in terms of section 41(1) of the Companies Act.
8.2 Shareholders are hereby advised that the Company has today, Friday, 19 June 2026, distributed a
circular to shareholders in relation to the Acquisitions, including, inter alia, a resolution to be voted
on in writing in terms of section 60 of the Companies Act ("Circular") to approve the issue of the
Consideration Shares ("Resolution"). The Circular is also available for viewing on the Company's
website at https://www.heriotreit.com/investor-relations.
8.3 The salient dates and times relating to the Circular and the Resolution are set out below:
Date
2026
Record date to determine which shareholders are entitled to receive the
Circular and are eligible to vote on the Resolution Friday, 12 June
Circular distributed to Shareholders on Friday, 19 June
Announcement of distribution of the Circular published on the Stock
Exchange News Service ("SENS") on Friday, 19 June
Deemed date of delivery (seven calendar days from distribution of the
Circular) Friday, 26 June
Voting period opens on Friday, 26 June
Last day for voting (20 business days from voting period opening), by no
later than 17:00 on 1 Friday, 24 July
Results of voting expected to be announced on SENS at the earlier of As soon as possible
after the proposed
Resolution is passed
or on Friday, 24 July
Notes:
1. Shareholders should note that the Resolution will be adopted as soon as the required votes to approve the
Resolution have been received by the transfer secretaries of the Company, despite the 20 business day voting
period still being open.
2. All dates and times indicated above are South African Standard Time.
3. The above dates and times are subject to amendment at the discretion of the Company. Any such amendment
will be released on SENS.
Johannesburg
19 June 2026
Designated Advisor
Valeo Capital (Pty) Limited
Date: 19-06-2026 01:00:00
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