March 18 (SeeNews) - South Africa's Tower Property Fund said on Wednesday it has agreed to sell its Vukovarska retail property in the Croatian capital Zagreb at an 11% premium to its book value.
In particular, the Croatian subsidiary Tower Europe Retail No. 2 d.o.o. (Tower Retail) has signed an agreement to sell the property to 3D Properties No.1 d.o.o. for an aggregate consideration of 12.42 million euro ($13.64 million), which is 11% above Vukovarska's most recent independent valuation of 11.18 million euro, Tower Property Fund said in a statement.
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The payment of the sales price is expected in April 2020.
"The disposal is conditional upon certain conditions precedent being fulfilled, including the cooperation of the seller with 3D Properties’ bankers and the final transfer of the property. The agreement in respect of the disposal contains warranties, undertakings and indemnities which are normal for a disposal of this nature," the statement reads.
The Vukovarska property spreads on an area of 12,560 square metres and has a gross leasable area (GLA) of 3,223 square metres. It comprises a Konzum hypermarket and is let to Croatian retailer Konzum Plus, Tower said.
Zagreb-based Tower Retail is wholly-owned by TPF International Limited (TPF), Tower’s Mauritian 74%-owned unit which operates its Croatian assets.
"A key strategic focus of Tower has been the reduction of its euro debt secured by South African properties. Tower intends using its attributable portion (74% of net proceeds) of the disposal, amounting to approximately €6.5 million after settlement of the mortgage bond and other costs, to reduce this debt," the statement read.
In February, Tower said that it owns a portfolio of 43 properties in South Africa and Croatia valued at 5.0 billion South African rand ($300 million/272 million euro), adding the six properties in Croatia represent 32% of the fund’s total value.
(1 euro = 18.4002 South African rand)