Balwin Properties : Acquisition of new head office building in Melrose Arch

Balwin Properties Limited

(Incorporated in the Republic of South Africa) Registration Number: 2003/028851/06 Share code: BWN

ISIN: ZAE000209532 ("Balwin")

ACQUISITION OF NEW HEAD OFFICE BUILDING IN MELROSE ARCH

1. INTRODUCTION

Shareholders are hereby advised that a wholly owned subsidiary of Balwin, Balwin Corlett (Pty) Ltd (the "Purchaser"), has concluded a Sale Agreement (the "Agreement"), with The Corlett Drive Trust (the "Seller") in terms of which Balwin Corlett has agreed to purchase Erf 108 Birnam, measuring 2 999 (two thousand nine hundred ninety nine) square meters in extent (the "Property") for a purchase price of R125,802,942 (One Hundred and Twenty Five Million Eight Hundred and Two Nine Hundred and Forty Two Rand) (the "Transaction").

2. OVERVIEW OF THE PROPERTY AND RATIONALE FOR THE TRANSACTION

The Property is situated within the upmarket area of Melrose Arch which is a rapidly developing commercial and residential node. The Property is highly visible from the M1 highway and is perfectly situated to capitalize on the advertising opportunities. The Property is accessible from Corlett Drive via the M1, which provides easy access into Melrose Arch and various surrounding amenities.

Given the need for additional office space in the Group, Balwin initially concluded a Head Lease of the Property for a period of 10 years. Subsequently, and after the commencement of renovations to the Property, Balwin entered into negotiations with the Sellers to acquire the Property.

Ownership of the Property will give Balwin better control over its operating expenses whilst ensuring that Balwin retains the benefits of capital growth and any improvements it makes to the Property.

Through the acquisition of the Property, Balwin aims to improve its corporate image by relocating to a 6 Star green rated, modern, Grade A+ or P-Grade Property that is easily accessible and in a high profile and desirable location. The Property will also facilitate Balwin promoting staff welfare given the facilities and amenities available to staff, both in and around the building. Balwin also intends to rehabilitate the park opposite the Property in order to create an area that can contribute to staff welfare in the Group.

The Property has a Gross Lettable Area of 7341 square meters consisting of office space, exterior areas, common areas and storage space. Balwin will initially occupy approximately 2500 square meters of the total GLA, with the balance available for lease by third parties at market related rates. A number of Balwin's top suppliers and professionals have shown strong interest in joining Balwin in the building and see this as a strategic business move. Balwin believes that the risk of having vacant office space is low. The Property has achieved a 6 star green rating and tenants will benefit from reduced utility costs, thus making the building an attractive proposition for tenants.

3. PURCHASE CONSIDERATION

The total consideration payable by the Purchaser to the Seller in terms of the Agreement is R125,802,942 (One Hundred and Twenty-Five Million Eight Hundred and Two Thousand Nine Hundred and Forty Two Rand) ("Purchase Consideration"), which is to be paid by the Purchaser on the date of transfer in the applicable deeds registry.

The Property is to be disposed of as a going concern as contemplated in section 11 of the VAT Act and the sale will be inclusive of VAT at zero percent.

The full Purchase Price will be funded by a loan to be secured by the registration of a mortgage bond over the Property. There will be no initial constraint on the cash flow of Balwin. The funding for the Transaction has, at the date of this announcement, been approved by Investec Bank.

4. CONDITIONS PRECEDENT TO THE TRANSACTION

At the date of this SENS announcement, the Board of Directors have approved the Transaction and there are no conditions precedent.

5. EFFECTIVE DATE OF THE TRANSACTION

In terms of the Agreement, the effective date of the Transaction will be the signature namely7 April 2022.

6. JSE CATEGORISATION

The Transaction is categorised as a Category 2 transaction in terms of paragraph 9.5(a) of the JSE Listings Requirements and accordingly no shareholder approval is required.

Johannesburg

07 April 2022

Sponsor:

Investec Bank Limited