Spear Reit : Voluntary Announcement – Disposal of 8 Section Street

SPEAR REIT LIMITED

(Incorporated in the Republic of South Africa) (Registration number 2015/407237/06) Share Code: SEA

ISIN: ZAE000228995

LEI: 378900F76170CCB33C50 Approved as a REIT by the JSE

("Spear" or "the Company")

VOLUNTARY ANNOUNCEMENT - DISPOSAL OF 8 SECTION STREET

Shareholders are hereby advised that on 11 April 2022, Spear entered into a sale of letting enterprise agreement ("Agreement") with Snow Storm Investments Proprietary Limited ("Purchaser"), in terms of which Spear will sell the immovable property known as Erf 17611 Cape Town, situated at 8 Section Street, Paarden Eiland ("Property") and the letting enterprise conducted by it on such Property, to the Purchaser for a gross purchase consideration of R22,500,000 ("Disposal").

Shareholders are further advised that the Agreement does not contain any conditions precedent and that the Disposal is accordingly unconditional. The anticipated date of transfer of the Property is July 2022.

The Disposal is in line with Spear's loan-to-value ("LTV") reduction roadmap set out to the market as the strategic objective is to reduce the Spear group LTV to a range of between 38% and 43%. The Disposal will further reduce group LTV by 30 bps. Post the finalisation of the Disposal, the forecasted Spear group LTV will be between 38,5% and 39,5%.

The Disposal has been concluded at a 7.56% net premium to Spear's latest reported book value of the asset after deducting all transaction costs associated with the Disposal. The Disposal reinforces the conservative nature of Spear's portfolio valuations and gives further credence to overall portfolio valuations.

The disposal of this non-core asset further aligns with Spear's strategy of prudently recycling capital invested in office assets, into strategically located industrial and convenience retail opportunities in the Western Cape, with values exceeding the minimum investment criteria threshold of R100,000,000.

The Disposal is uncategorised in terms of the JSE Limited Listings Requirements, and the information contained in this announcement has been voluntarily disclosed by the Company.

Cape Town

14 April 2022

Sponsor PSG Capital