THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION The definitions commencing on page 7 of this Circular apply, mutatis mutandis, to this front cover. Action required If you are in any doubt as to what action you should take arising from this Circular, please consult your broker, CSDP, banker, accountant, attorney or other professional advisor immediately. If you have disposed of all your Octodec Linked Units, please forward this Circular to the purchaser of such Octodec Linked Units or to the broker, CSDP, banker, accountant, attorney or other agent through whom the disposal was effected. Octodec Linked Unitholders are referred to page 1 of this Circular, which sets out the action required by them. Octodec does not accept responsibility, and will not be held liable for any action of, or omission by, any CSDP or broker including, without limitation, any failures on the part of the CSDP or the broker of any beneficial owner of Octodec Linked Units to notify such beneficial owner of the contents of this Circular. Octodec Investments Limited (Incorporated in the Republic of South Africa) (Registration number 1956/002868/06) Share Code: OCT ISIN Code: ZAE REIT status approved Circular to Octodec Shareholders and Octodec Debenture Holders Regarding: (i) the proposed acquisition by Octodec of all the Premium Linked Units which it does not already own, to be settled through the issue of Octodec No Par Value Shares, in the ratio of 88.5 Octodec No Par Value Shares per 100 Premium Linked Units acquired; and (ii) the Capital Restructure, which includes: the proposed amendment to the Octodec Debenture Trust Deed to permit the cancellation of the Octodec Debentures, for no consideration; the proposed delinking of the Octodec Par Value Shares and Octodec Debentures, comprising the Octodec Linked Units; the proposed cancellation of the Octodec Debentures and the Octodec Trust Deed to be effected by way of the Octodec Scheme; the proposed capitalisation of the value of the Octodec Debentures to form part of Octodec s stated capital; the conversion of Octodec Par Value Shares to Octodec No Par Value Shares; the issue of a new ISIN from the JSE for the Octodec No Par Value Shares; the Amendments to the MOI; and the Increase in Authorised Share Capital and incorporating: a report prepared by the Independent Expert in terms of section 114(3) of the Companies Act; extracts of section 115 of the Companies Act dealing with the approval requirement for the Octodec Scheme and section 164 of the Companies Act dealing with dissenting Octodec Linked Unitholders appraisal rights; the Revised Listing Particulars; a notice convening a General Meeting of Octodec Debenture Holders; a form of proxy for use by Octodec Debenture Holders (blue); a notice convening a General Meeting of Octodec Shareholders; a form of proxy for use by Certificated Octodec Shareholders and Dematerialised Octodec Shareholders with own-name registration only (yellow); and an election, surrender and transfer form in respect of the Octodec Scheme for use by Certificated Octodec Linked Unitholders and ownname Dematerialised Octodec Linked Unitholders only (pink) (CSDP and broker nominees will complete the form on behalf of non-own name Dematerialised Octodec Linked Unitholders). Investment Bank, Corporate Advisor and Sponsor Legal Advisors Nedbank Capital Tugendhaft Wapnick Banchetti and Partners Independent Reporting Accountants Independent Expert Deloitte & Touche Deloitte & Touche BDO Corporate Finance Proprietary Limited Competition Law Advisor Vani Chetty Competition Law Date of issue: Tuesday, 1 July 2014 This Circular is available in English only. Copies may be obtained from the Registered Office of Octodec or from Nedbank Capital at the address set out in the corporate information and advisors section of this Circular, or on the Company s website, from Tuesday, 1 July 2014 until the date of the General Meetings.

2 CORPORATE INFORMATION AND ADVISORS Company secretary and registered office Legal Advisors City Property Administration Proprietary Limited Tugendhaft Wapnick Banchetti and Partners (Registration number 1968/010808/07) (Firm number 8704) CPA House 5th Street 101 Du Toit Street Sandton, 2196, 0002 (PO Box , Sandton, 2146) (PO Box 15,, 0001) Investment Bank, Corporate Advisor and Sponsor Trustee for Octodec Debenture Holders Nedbank Capital, a division of Nedbank Limited A Tugendhaft (Registration number 1951/000009/06) Tugendhaft Wapnick Banchetti and Partners 135 Rivonia Road 5th Street Sandown, 2196 Sandton, 2196 (PO Box 1144, Johannesburg, 2000) (PO Box , Sandton, 2146) Independent Reporting Accountants Transfer Secretaries Deloitte & Touche Computershare Investor Services Proprietary Limited (Practice number E) (Registration number 2004/003647/07) Riverwalk Office Park, Block B 70 Marshall Street 41 Matroosberg Street Johannesburg, 2001 Ashlea Gardens X6, 0081 (PO Box 61051, Marshalltown, 2107) (PO Box 11007, Hatfield, 0028) Competition Law Advisor Independent Expert Vani Chetty Competition Law Proprietary Limited BDO Corporate Finance Proprietary Limited (Registration number 2007/009553/07) (Registration number: 1983/002903/07) 1st Floor, 24 Hurlingham Road 22 Wellington Road Illovo Boulevard Parktown, 2193 Illovo, 2132 (Private Bag X60500, Houghton, 2041) (PO Box 962, Northlands, 2116) Octodec Premium Date of incorporation: 8 November 1956 Date of incorporation: 4 May 1994 Place of incorporation:, South Africa Place of incorporation:, South Africa

3 ACTION REQUIRED BY OCTODEC LINKED UNITHOLDERS The definitions commencing on page 7 of this Circular apply, mutatis mutandis, to this Action required by Octodec Linked Unitholders section. Please take careful note of the following provisions regarding the action required by Octodec Linked Unitholders: 1. If you are in any doubt as to what action you should take arising from this Circular, please consult your broker, CSDP, banker, attorney, accountant or other professional advisor immediately. 2. If you have disposed of all of your Octodec Linked Units, this Circular should be handed to the purchaser of such Octodec Linked Units or to the broker, CSDP, banker, attorney or other agent through whom the disposal was effected. 3. This Circular contains information relating to the Proposed Transaction and the Capital Restructure. You should carefully read through this Circular and decide how you wish to vote on the Resolutions to be proposed at the General Meetings. 4. The General Meetings, convened in terms of the notice attached to this Circular, will be held at CPA House, 101 Du Toit Street,, 0002 on Thursday, 31 July The General Meeting of Octodec Debenture Holders will commence at 12h30 and the General Meeting of Octodec Shareholders will commence at 12h General Meetings 5.1 If you hold Dematerialised Octodec Linked Units Own-name registration You are entitled to attend in person, or be represented by proxy, at the General Meetings. If you are unable to attend the General Meetings but wish to be represented thereat, you must complete and return the attached forms of proxy, in accordance with the instructions contained therein, to be received by the Transfer Secretaries as follows, by no later than 12h30 on Tuesday, 29 July Hand deliveries to: Postal deliveries to: Computershare Investor Services Proprietary Limited Computershare Investor Services Proprietary Limited Ground Floor PO Box Marshall Street Marshalltown, 2107 Johannesburg, Other than own-name registration You are entitled to attend, or be represented by proxy, at the General Meetings. You must advise your CSDP or broker timeously if you wish to attend, or be represented at the General Meetings. If you do wish to attend or be represented at the General Meetings, your CSDP or broker will be required to issue the necessary letter of representation to you to enable you to attend or be represented at the General Meetings. You must not complete the attached forms of proxy. If your CSDP or broker does not contact you, you are advised to contact your CSDP or broker and provide them with your voting instruction. If your CSDP or broker does not obtain instruction from you, they will be obliged to act in terms of your mandate furnished to them. 5.2 If you hold Certificated Octodec Linked Units The General Meetings You are entitled to attend, or be represented by proxy, at the General Meetings. 1

4 If you are unable to attend the General Meetings, but wish to be represented thereat, you must complete and return the attached forms of proxy, in accordance with the instructions contained therein, to be received by the Transfer Secretaries as follows, by no later than 12h30 on Tuesday, 29 July Capital Restructure Hand deliveries to: Postal deliveries to: Computershare Investor Services Computershare Investor Services Proprietary Limited Proprietary Limited Ground Floor PO Box Marshall Street Marshalltown, 2107 Johannesburg, In order to comply with the recently enacted Financial Markets Act, the Octodec No Par Value Shares may only be issued, pursuant to the Capital Restructure, in dematerialised form. Certificated Octodec Linked Unitholders will therefore only receive statements (which are not the physical Documents of Title) and will be required to appoint a CSDP or broker should they want to trade their Octodec No Par Value Shares on the JSE. They will have to present the statement to the CSDP or Broker for dematerialisation For assistance in opening such an account with any broker or CSDP, Octodec Linked Unitholders are advised to visit the website of the JSE ( or Strate ( which has the names and contact details of all CSDP s and members of the JSE who can assist with the opening of such accounts. You will need to complete a custody mandate and provide FICA verification to your chosen broker or CSDP, a process similar to opening a bank account To expedite the abovementioned process, Certificated Octodec Linked Unitholders who anticipate the implementation of the Capital Restructure are requested to surrender their original Octodec Linked Unit certificates (copies will not be accepted), under cover of the Form of Surrender provided in this Circular, to the Transfer Secretaries prior to 12h00 on Friday, 29 August Octodec Linked Unit certificates so received will be held in trust by the Transfer Secretaries pending the Capital Restructure being implemented On Thursday, 31 July 2014, the results of the General Meetings will be released on SENS. Should the Capital Restructure be approved and implemented, the Certificated Octodec Linked Unitholders who have not already surrendered their Octodec Linked Unit certificates will be required to do so under the attached Form of Surrender which should be retained for that purpose, as no further Form of Surrender will be circulated to Certificated Octodec Linked Unitholders. Additional copies may be requested from the Transfer Secretary at the registered address of the Transfer Secretary as disclosed in the corporate information and advisors section of this Circular In the event that the Capital Restructure is not approved, Octodec Linked Unit certificates will be returned to Certificated Octodec Linked Unitholders by registered post, at the risk of the recipient on or about Thursday, 7 August In the case where the relevant Octodec Linked Unit certificates are restrictively endorsed in terms of the South African Exchange Control Regulations, the following will apply: for non-residents who are emigrants from the Common Monetary Area, the replacement Documents of Title will be sent to the Certificated Octodec Linked Unitholders authorised dealer in foreign exchange in South Africa; and for all other non-residents, the replacement Documents of Title will be restrictively endorsed non-resident in terms of the South African Exchange Control Regulations. 2

5 6. Electronic participation Should any Octodec Linked Unitholder wish to participate in the General Meetings by way of electronic participation, that Octodec Linked Unitholder shall be obliged to make application by close of business on Thursday, 24 July 2014 (at least five Business Days prior to the General Meetings), in writing (including details as to how the Octodec Linked Unitholder or its representative can be contacted) to so participate, to the Transfer Secretaries, Computershare, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107), at least five Business Days prior to the General Meetings. Octodec Linked Unitholders who wish to participate in the General Meetings by dialling in must note that they will not be able to vote electronically. Should such Octodec Linked Unitholders wish to have their votes counted at the General Meetings, they are welcome to cast their votes via representation at the General Meetings either by proxy or by letter of representation, as provided for in the notices of General Meetings. The costs of accessing any means of electronic participation provided by Octodec will be borne by the Octodec Linked Unitholder so accessing the electronic participation. Octodec cannot be held liable for any loss, damage, penalty or claim arising in any way from the use of the telecommunication facility whether or not as a result of any act or omission on the part of Octodec or anyone else. 7. Voting rights All issued Octodec Linked Units rank pari passu with each other. Every Octodec Shareholder and Octodec Debenture Holder present or represented by proxy shall have one vote on a show of hands, and on a poll, one vote respectively for every Octodec Par Value Share and Octodec Debenture. 8. Dissenting Octodec Linked Unitholders appraisal rights Octodec Linked Unitholders who wish to exercise their rights in terms of section 164 of the Companies Act relating to the Octodec Scheme, are referred to paragraph of the Circular and the statement of their rights set out therein. Octodec Linked Unitholders who wish to exercise their rights in terms of the aforementioned section are required, before the Octodec Scheme Resolutions are voted on at the General Meetings, to give notice to Octodec, in writing, objecting to the said resolutions and to vote against those resolutions at the General Meetings. 3

6 TABLE OF CONTENTS The definitions commencing on page 7 of this Circular apply, mutatis mutandis, to this table of contents. CORPORATE INFORMATION AND ADVISORS IFC ACTION REQUIRED BY OCTODEC LINKED UNITHOLDERS 1 TABLE OF CONTENTS 4 IMPORTANT DATES AND TIMES 6 DEFINITIONS 7 1. INTRODUCTION PURPOSE OF THIS CIRCULAR THE PROPOSED TRANSACTION Background on Octodec and Premium Rationale for the Proposed Transaction Mechanics and classification of the Proposed Transaction Terms of the Proposed Transaction Scheme Circular and process Opinion and recommendation on the Proposed Transaction THE CAPITAL RESTRUCTURE Background to the Capital Restructure REIT Restructure Increase in Authorised Share Capital Conditions precedent to the Capital Restructure Opinion and recommendation on the Octodec Scheme LINKED UNIT CAPITAL OF OCTODEC LINKED UNITHOLDER COMMITMENTS FINANCIAL INFORMATION Forecast financial information of Premium Historic financial information of Premium Forecast financial information of Octodec Pro forma financial information PREMIUM S PROPERTY PORTFOLIO Analysis of the property portfolio Property specific information MAJOR LINKED UNITHOLDERS AND CHANGE IN CONTROLLING UNITHOLDERS MATERIAL CHANGES MATERIAL CONTRACTS MATERIAL BORROWINGS VENDORS TRADING HISTORY OF OCTODEC LINKED UNITS 26 4

7 15. DIRECTORS AND DIRECTORS INTERESTS Octodec Independent Board Octodec Directors Directors abridged curricula vitae Directors remuneration Directors interests in Octodec Linked Units Directors interests in Premium Linked Units Directors interests in transactions LITIGATION STATEMENT DIRECTORS RESPONSIBILITY STATEMENT CAPITAL ADEQUACY EXPENSES RELATING TO THE PROPOSED TRANSACTION AND THE CAPITAL RESTRUCTURE CONSENTS GOVERNING LAW DOCUMENTS AVAILABLE FOR INSPECTION 35 ANNEXURE 1: INDEPENDENT EXPERT S OPINION ON THE PROPOSED TRANSACTION 36 ANNEXURE 2: INDEPENDENT EXPERT S OPINION ON THE OCTODEC SCHEME 40 ANNEXURE 3: LINKED UNITHOLDER COMMITMENTS 43 ANNEXURE 4: PREMIUM S FORECAST FINANCIAL INFORMATION 44 ANNEXURE 5: INDEPENDENT REPORTING ACCOUNTANTS REPORT ON PREMIUM S FORECAST FINANCIAL INFORMATION 46 ANNEXURE 6: OCTODEC S FORECAST FINANCIAL INFORMATION 49 ANNEXURE 7: INDEPENDENT REPORTING ACCOUNTANTS REPORT ON OCTODEC S FORECAST FINANCIAL INFORMATION 52 ANNEXURE 8: PRO FORMA FINANCIAL INFORMATION 56 ANNEXURE 9: INDEPENDENT REPORTING ACCOUNTANTS REPORT ON THE PRO FORMA FINANCIAL INFORMATION 61 ANNEXURE 10: INDEPENDENT REPORTING ACCOUNTANTS REPORT ON THE VALUE AND EXISTENCE OF PREMIUM S ASSETS AND LIABILITIES 63 ANNEXURE 11: PREMIUM S PROPERTY PORTFOLIO 64 ANNEXURE 12: PROPERTY VALUATION SUMMARY REPORT FROM AMANDA DE WET 70 ANNEXURE 13: PROPERTY VALUATION SUMMARY REPORT FROM VAN ZYL VALUERS 98 ANNEXURE 14: BOARD REPORT ON THE CONVERSION OF THE PAR VALUE ORDINARY SHARES OF OCTODEC INTO ORDINARY SHARES OF NO PAR VALUE 122 ANNEXURE 15: AMENDMENTS TO THE MOI 124 ANNEXURE 16: OCTODEC LINKED UNIT TRADING HISTORY ON THE JSE 126 ANNEXURE 17: MATERIAL BORROWINGS OF OCTODEC 127 ANNEXURE 18: MATERIAL BORROWINGS OF PREMIUM 129 ANNEXURE 19: PREMIUM HISTORICAL FINANCIAL STATEMENTS 131 ANNEXURE 20: EXTRACTS FROM THE COMPANIES ACT 135 NOTICE OF GENERAL MEETING OF OCTODEC DEBENTURE HOLDERS 141 FORM OF PROXY FOR OCTODEC DEBENTURE HOLDERS (BLUE) 145 NOTICE OF GENERAL MEETING OF OCTODEC SHAREHOLDERS 147 FORM OF PROXY FOR OCTODEC SHAREHOLDERS (YELLOW) 153 FORM OF SURRENDER AND TRANSFER (PINK) 155 REVISED LISTING PARTICULARS 159 5

8 IMPORTANT DATES AND TIMES The definitions commencing on page 7 of this Circular apply, mutatis mutandis, to this Important dates and times section. Record date to determine which Octodec Linked Unitholders are eligible to receive the Circular Circular posted to Octodec Linked Unitholders Last day to trade in order to be recorded in the Register on the record date for voting at the General Meetings Record date for voting at the General Meetings Forms of proxy to be received by 12h30 General Meeting of Octodec Debenture Holders to be held at 12h30 General Meeting of Octodec Shareholders to be held at 12h45 Results of the General Meetings to be released on SENS Results of the General Meetings to be published in the press Last date for dissenting Octodec Debenture Holders to request Octodec to apply to Court for approval of the Octodec Scheme, under section 115(3)(a) of the Companies Act, if 15% or more of the voting rights exercised were against the Octodec Scheme Resolutions Last date for dissenting Premium Linked Unitholders to request Premium to apply to Court for approval of the Scheme, under section 115(3)(a) of the Companies Act, if 15% or more of the voting rights exercised were against the Scheme Resolutions Declaration date in respect of the Octodec Special Distribution Last date for Octodec to apply to Court for approval of the Octodec Scheme in the event that sufficient objections to the Octodec Scheme are received from dissenting Octodec Debenture Holders under section 115(3)(b) of the Companies Act 2014 Friday, 20 June Tuesday, 1 July Friday, 18 July Friday, 25 July Tuesday, 29 July Thursday, 31 July Thursday, 31 July Thursday, 31 July Friday, 1 August Thursday, 7 August Thursday, 7 August Friday, 8 August Thursday, 14 August Last date for Octodec to send objecting Octodec Debenture Holders notices of the adoption of the Octodec Scheme Resolutions approving the Octodec Scheme, in terms of section 164 of the Companies Act Thursday, 14 August Last date to trade in order to be recorded in the Register on the record date for the Octodec Special Distribution Last date to trade in order to be recorded in the Register on the record date for the Octodec Scheme Suspension of trading of Octodec Linked Units under the current ISIN ZAE , from the commencement of trade on Octodec No Par Value Shares listed on the JSE, to trade under the share code OCT and ISIN ZAE Suspension of trading of Premium Linked Units from the commencement of trade on Scheme Consideration Shares listed on the JSE Last date for dissenting Octodec Debenture Holders to deliver a written notice to Octodec and the TRP demanding Octodec to pay the fair value of all Octodec Debentures held by such Octodec Debenture Holders in terms of section 164 of the Companies Act Record date for the Octodec Special Distribution Record date for the Octodec Scheme Record date for the Proposed Transaction Anticipated Effective Date of the Proposed Transaction Date on which Scheme Participants CSDP or broker accounts will be credited with the Scheme Consideration Shares Termination of listing of Premium Linked Units at the commencement of trade on Finalisation date in respect of the Octodec Special Distributions on or about Payment date for the Special Distribution, on or about Friday, 22 August Friday, 22 August Monday, 25 August Monday, 25 August Monday, 25 August Monday, 25 August Thursday, 28 August Friday, 29 August Friday, 29 August Friday, 29 August Monday, 1 September Monday, 1 September Monday, 1 September Tuesday, 28 October Monday, 17 November Notes: 1. All dates and times indicated in this Circular are South African dates and times. 2. These dates and times are subject to amendment. Any such amendment will be released on SENS. 6

9 DEFINITIONS In this Circular, the Revised Listing Particulars, the annexures and forms attached hereto, unless otherwise stated or clearly indicated by the context, the words in the first column have the meanings stated opposite them in the second column, words in the singular include the plural and vice versa, words importing one gender include the other genders and references to a natural person include references to a juristic person and vice versa: Amanda de Wet or AB Amendments to the MOI AltX BDO or Octodec Independent Expert Amanda de Wet Consultants and Investors CC, (Registration Number 5542), a close corporation incorporated in South Africa and an independent property valuer to Octodec; the proposed amendments to the MOI as detailed in paragraph of this Circular; the Alternative Exchange of the JSE; BDO Corporate Finance Proprietary Limited, (Registration Number 1983/002903/07), the independent expert appointed by the Octodec Independent Board to provide a fairness opinion as required by the Listings Requirements for the purposes of the Proposed Transaction, and a fair and reasonable opinion in terms of section 114 of the Companies Act, for purposes of the Capital Restructure; bps basis points is a unit being equal to 1/100th of 1%; Business Days Capital Restructure CBD cents Certificated Octodec Linked Units Certificated Octodec Linked Unitholders Circular any day other than a Saturday, Sunday or an official public holiday in South Africa; collectively, the REIT Restructure and the Increase in Authorised Share Capital; central business district; South African cents, a denomination of the official currency of South Africa; Octodec Linked Units, represented by linked unit certificates or other physical Documents of Title, which have not been surrendered for dematerialisation in terms of the requirements of Strate; Octodec Linked Unitholders holding Certificated Octodec Linked Units; this bound circular, dated Tuesday, 1 July 2014 including all annexures and the Revised Listing Particulars attached hereto; City Property City Property Administration Proprietary Limited (Registration number 1968/010808/07), a private company registered and incorporated in South Africa, 100% owned by the Wapnick Family, the company secretary, asset management company and property management company for Octodec and Premium; City Property Specific Issue Common Monetary Area Companies Act Companies Regulations Competition Act Competition Authorities Competition Commission Competition Tribunal the specific issue of Octodec Linked Units at R19.25 per Linked Unit, for a total cash consideration of R to City Property, pursuant to the IPS Specific Issue in terms of the Subscription Agreement that was concluded; South Africa, the Republic of Namibia and the Kingdoms of Lesotho and Swaziland; the Companies Act, 2008 (No. 71 of 2008), as amended; the Companies Regulations, 2011 in terms of the Companies Act; the Competition Act, 1998 (No. 89 of 1998), as amended; collectively, the Competition Commission and the Competition Tribunal; the statutory body constituted in terms of the Competition Act; the Tribunal established in terms of section 26 of the Competition Act; Computershare or Transfer Secretaries Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07), a private company registered and incorporated in South Africa and the transfer secretaries to Octodec and Premium; Court CSDP Deloitte & Touche or Independent Reporting Accountants the High Court of South Africa; a Central Securities Depository Participant, appointed by individual Octodec Linked Unitholders for the purpose of, and in regard to, dematerialisation in terms of the Financial Markets Act; Deloitte & Touche (Practice number E), the independent reporting accountants and auditors to Octodec; 7

10 Dematerialised Octodec Linked Unitholders Dematerialised Octodec Linked Units Dematerialised Octodec Shares Dematerialised Premium Linked Unitholders Dematerialised Premium Linked Units DMTN Programme Documents of Title Effective Date Enlarged Group Exchange Control Regulations FICA Financial Markets Act FTSE General Meeting of Octodec Debenture Holders General Meeting of Octodec Shareholders General Meetings GLA IFRS Income Tax Act Increase in Authorised Share Capital Independent Property Valuers Index IPS IPS Specific Repurchase JIBAR Octodec Linked Unitholders that hold Dematerialised Octodec Linked Units; Octodec Linked Units that have been incorporated into the Strate system and which are held on Octodec s Sub-Register in electronic form in terms of the Financial Markets Act; Octodec No Par Value Shares that have been incorporated into the Strate system and which are held on the Company s Sub-Register in electronic form in terms of the Financial Markets Act; Premium Linked Unitholders that hold Dematerialised Premium Linked Units; Premium Linked Units that have been incorporated into the Strate system and which are held on Premium s Sub-Register in electronic form in terms of the Financial Markets Act; the domestic medium term note programme issued by Premium on 2 March 2012, and any other such, or similar programmes, which may be issued by Premium and/or by Octodec from time to time; valid linked unit certificates, and/or certified transfer deeds, and/or balance receipts, or any other documents of title to Octodec Linked Units and/or Premium Linked Units; the effective date of the Proposed Transaction, which is anticipated to be on or about 1 September 2014; collectively, the Octodec Group and the Premium Group pursuant to the implementation of the Proposed Transaction; the Exchange Control Regulations, 1961, as amended, promulgated in terms of section 9 of the Currency Exchanges Act, 1933 (No. 9 of 1933), as amended; the Financial Intelligence Centre Act, 2001 (No. 38 of 2001), as amended; the Financial Markets Act, 2012 (No. 19 of 2012), as amended; an index calculation entity co-owned by the Financial Times and the London Stock Exchange; the general meeting of Octodec Debenture Holders to be held at the Registered Office, commencing at 12h30 on Thursday, 31 July 2014 to consider and, if deemed appropriate, to approve the resolutions as more fully set out in the notice of General Meeting to Octodec Debenture Holders attached to the Circular; the general meeting of Octodec Shareholders to be held at the Registered Office, commencing at 12h45 on Thursday, 31 July 2014 to consider and, if deemed appropriate, to approve the resolutions as more fully set out in the notice of General Meeting to Octodec Shareholders attached to the Circular; collectively, the General Meeting of Octodec Debenture Holders and the General Meeting of Octodec Shareholders; gross lettable area; International Financial Reporting Standards; the Income Tax Act, 1962 (No. 58 of 1962), as amended; the proposed increase in the authorised share capital of Octodec by the creation of new no par value shares which will, upon issue, rank pari passu in all respects with the existing Octodec No Par Value Shares in issue; collectively, Amanda de Wet and Van Zyl Valuers; FTSE/JSE SA Listed Property Index; IPS Investments Proprietary Limited (Registration number 2004/014568/07), a private company registered and incorporated in South Africa, the shares of which are held equally by Premium and Octodec; the specific repurchase by IPS of City Properties shares in IPS that was concluded in terms of the Repurchase Agreement, which details are disclosed in the circular to Octodec Linked Unitholders dated 14 November 2013; Johannesburg interbank agreed rate; 8

11 JSE the stock exchange operated by the JSE Limited (Registration number 2005/022939/06), a public company registered and incorporated in South Africa, licensed as an exchange under the Financial Markets Act; King III Last Practicable Date Linked Unitholder Commitments Listings Requirements LTV MOI NAV Nedbank Capital or Investment Bank, Corporate Advisor and Sponsor Own-Name Dematerialised Linked Unitholders Octodec or the Company Octodec Board or Octodec Directors Octodec Board Report Octodec City Property Management Agreement Octodec City Property Management Agreement Addendum Octodec Debenture Holders Octodec Debenture Trust Deed Octodec Debentures King Report on Governance for South Africa 2009 and the King Code of Governance Principles; the last practicable date prior to the finalisation of this Circular, being Friday, 20 June 2014; the written letters of support provided by certain Octodec Linked Unitholders and Premium Linked Unitholders in terms of which those Octodec linked Unitholders and Premium Linked Unitholders have undertaken, subject to certain conditions, to vote in favour of the Proposed Transaction and/or the Capital Restructure and/or the Scheme; the Listings Requirements of the JSE, as amended from time to time; loan to value; Octodec s memorandum of incorporation; net asset value; Nedbank Capital, a division of Nedbank Limited (Registration number 1951/000009/06), a public company incorporated and registered in South Africa, the investment bank, corporate advisor and sponsor to Octodec; those Octodec Linked Unitholders that have dematerialised their Octodec Linked Units through a CSDP and have instructed the CSDP to hold their Octodec Linked Units in their own name on Octodec s Sub-Register; Octodec Investments Limited (Registration number 1956/002868/06), a public company registered and incorporated in South Africa, all the linked units of which are listed on the JSE; the board of directors of Octodec, comprising the directors reflected on page 13 of this Circular; the report to Octodec Linked Unitholders, prepared by the Octodec Board relating to the conversion of the Octodec Par Values Shares into Octodec No Par Value Shares, as required by regulation 31(7) of the Companies Regulations; the written management agreement concluded between Octodec and City Property, dated 10 December 2010; the written addendum to the Octodec City Property Management Agreement, concluded between Octodec and City Property, dated 9 June 2014, which is subject to the approval of Octodec Shareholders; the holders of Octodec Debentures; the debenture trust deed, dated 23 July 1990 as read with the various deeds of amendment and supplemental debenture trust deeds, which govern the creation and issue of the Octodec Debentures; unsecured, variable rate debentures issued by Octodec, in terms of the Octodec Debenture Trust Deed, with a nominal value of 209 cents each; Octodec Financial Statements the reviewed financial statements of Octodec in respect of the period 1 September 2013 to 31 August 2014, expected to be finalised during October 2014; Octodec Group Octodec Independent Board or Octodec Independent Directors Octodec Linked Unitholders Octodec Linked Units or Linked Units Octodec No Par Value Shares Octodec Par Value Shares Octodec, its subsidiaries and its associates; the sub-committee of the Octodec Board, that was appointed to consider, and if thought fit, to propose the Proposed Transaction, comprising MJ Holmes, DL Rose and I Stern; holders of Octodec Linked Units; Octodec Par Value Shares irrevocably linked to Octodec Debentures in the ratio of one Octodec Par Value Share to one Octodec Debenture, trading as linked units on the JSE; ordinary no par value shares in the issued share capital of Octodec, consequent upon and subject to the passing of the Octodec Resolutions relating to the Octodec Share Conversion; Octodec ordinary shares having a par value of 1 cent in the issued share capital of Octodec; 9

12 Octodec Resolutions or Resolutions Octodec Scheme Octodec Scheme Resolutions Octodec Share Conversion Octodec Shareholders Octodec Special Distribution Ordinary Resolutions Premium Premium Board or Premium Directors Premium City Property Management Agreement Premium Financial Statements Premium Group Premium Independent Board or Premium Independent Directors Premium Independent Expert Premium Linked Unitholders Premium Linked Units Premium Register Premium Special Distribution Prime Overdraft Rate Proposed Transaction the ordinary resolutions and special resolutions to be approved by the requisite majority of Octodec Debenture Holders and Octodec Shareholders, as the case may be, at the General Meetings, for purposes of approving the Capital Restructure and the Proposed Transaction, as fully set out in the notices of General Meetings; the scheme of arrangement in terms of section 114(1)(c) of the Companies Act, to be proposed by the Octodec Board between Octodec and the Octodec Linked Unitholders at the General Meetings, in terms of which the Octodec Debentures will be cancelled for no consideration and the Octodec Debenture Trust Deed will be terminated, pursuant to the provisions of section 25BB(8) of the Income Tax Act; the Ordinary Resolutions and Special Resolutions (comprising part of the Octodec Resolutions) to be approved by the requisite majority of Octodec Shareholders and Octodec Debenture Holders, as the case may be, at the General Meetings, for purposes of approving the Octodec Scheme, as fully set out in the notices of General Meetings; the proposed conversion of Octodec Par Value Shares into Octodec No Par Value Shares in terms of the Capital Restructure; the holders of Octodec Par Value Shares or Octodec No Par Value Shares, as the case maybe; Octodec s distributable earnings for the period commencing on 1 March 2014 and ending on 31 August 2014, which will be finally calculated based on the Octodec Financial Statements, and paid on or before the Special Distribution Date, to Octodec Linked Unitholders recorded as such on the Special Distribution Record Date; the ordinary resolutions to be passed at the General Meetings by more than 50% of Octodec Debenture Holders and Octodec Shareholders, respectively, entitled to vote and be present at the General Meetings or represented by proxy, to authorise and approve the Capital Restructure and the Proposed Transaction, as fully set out in the notices of General Meetings; Premium Properties Limited (Registration number 1994/003601/06), a public company registered and incorporated in South Africa, all the linked units of which are listed on the JSE; the board of directors of Premium; the written management agreement concluded between Premium and City Property, dated 10 December 2010; the reviewed financial statements of Premium to be prepared in respect of the period 1 March 2014 to 31 August 2014, expected to be finalised during October 2014; Premium, its subsidiaries and its associates; the independent sub-committee of Premium Directors, who were appointed to consider and if thought fit, to propose the Scheme, comprising PO Goldhawk, MJ Leeming and SG Morris; the independent expert appointed by the Premium Independent Board to provide an opinion on whether the Scheme is fair and reasonable to Premium Linked Unitholders; holders of Premium Linked Units; ordinary shares, having a par value of 1 cent each in the issued share capital of Premium, irrevocably linked to the unsecured, variable rate debentures issued by Premium with a nominal value of 149 cents each, in the ratio of one Premium ordinary share to one Premium debenture, trading as linked units on the JSE; collectively, the register of Certificated Premium Linked Unitholders and Premium s Sub- Register; Premium s distributable earnings for the period commencing on 1 March 2014 and ending on 31 August 2014, which will be finally calculated based on the Premium Financial Statements, and paid on or about the Special Distribution Date, to Premium Linked Unitholders registered on the Special Distribution Record Date; the publicly quoted basic interest rate per annum ruling from time to time at which Nedbank lends on overdraft to its best grade customers on an unsecured basis, compounded monthly in arrear; the proposed acquisition by Octodec of the Scheme Linked Units to be effected by way of the Scheme; 10

13 Rand or R Register South African Rand, the official currency of South Africa; collectively, the register of certificated Octodec Linked Unitholders and Octodec s Sub- Register; Registered Office the registered office of Octodec, being CPA House, 101 Du Toit Street,, 0002; Registrar or Registrar of Companies REIT REIT Restructure REIT Tax Dispensation Repurchase Agreement Revised Listing Particulars SAICA Scheme Scheme Circular Scheme Consideration Scheme Consideration Shares Scheme Linked Units Scheme Meeting Scheme Participants Scheme Record Date Scheme Resolutions SENS South Africa the Registrar of Companies in South Africa; Real Estate Investment Trusts as defined in section 1 of the Income Tax Act; the Octodec Scheme, the Octodec Share Conversion and the Amendments to the MOI; the Taxation Laws Amendment Act (No. 22 of 2012) containing section 25BB Real Estate Investment Trusts tax dispensation; the agreement entered into by Octodec, Premium, City Property and IPS, dated 28 October 2013 in terms of which City Property s shareholding in IPS was repurchased; the revised listing particulars of Octodec in terms of the Listing Requirements, attached to this Circular; South Africa Institute of Chartered Accountants; the scheme of arrangement in terms of section 114(1)(d) of the Companies Act, proposed by the Premium Independent Board between Premium and the Premium Linked Unitholders, in terms of which Octodec will, if the Scheme becomes operative, acquire all of the Scheme Linked Units for the Scheme Consideration; the circular to be issued to Premium Linked Unitholders proposing the Scheme, dated Tuesday, 1 July 2014; 88.5 Octodec No Par Value Shares for every 100 Premium Linked Units held by Scheme Participants on the Scheme Record Date; the Octodec Par Value Shares to be issued to Scheme Participants in settlement of the Scheme Consideration; the Premium Linked Units held by Scheme Participants on the Scheme Record Date; the general meeting of Premium Linked Unitholders convened to consider, and if thought fit, to approve the Scheme; Premium Linked Unitholders, other than Octodec, that are recorded in the Premium Register on the Scheme Record Date; the record date for Premium Linked Unitholders to be recorded in the Premium Register in order to be entitled to receive the Scheme Consideration, being 29 August 2014 and as defined in the Scheme Circular; the resolutions to be proposed at the Scheme Meeting, as more fully set out in the notice of general meeting of Premium Linked Unitholders, that is attached to the Scheme Circular, to approve the Scheme; the Stock Exchange News Service of the JSE; the Republic of South Africa; Special Distribution Date Monday, 17 November 2014; Special Distribution Record Date Friday, 29 August 2014; Special Distributions Special Resolutions collectively, the Octodec Special Distribution and the Premium Special Distribution; the special resolutions to be passed at the General Meetings by at least 75% of Octodec Debenture Holders and Octodec Shareholders entitled to vote and present at the General Meetings or represented by proxy, to authorise and approve the Capital Restructure and the Proposed Transaction, as fully set out in the notices of General Meetings; Specified Date 31 August 2014; Stanlib Strate Stanlib Asset Management Limited (Registration number 1999/012566/06), in its capacity as investment manager, holding and/or controlling either directly or on behalf of third party clients, Octodec Linked Units and Premium Linked Units; the share settlement and clearing system utilised by the JSE for all share transactions concluded on the JSE, managed by Strate Limited (Registration number 1998/022242/06), a public company registered and incorporated under the laws of South Africa; 11

14 Sub-Register a sub-register of linked unitholders maintained in terms of the Companies Act and administered by a linked unitholder s CSDP in electronic form; Subscription Agreement the agreement entered into by Octodec and City Property; dated 28 October 2013 and detailed in the circular distributed to Octodec Linked Unitholders dated Thursday, 14 November 2013 pursuant to the IPS Specific Repurchase; Swap Ratio TNAV Transaction Agreement TRP TWB or Legal Advisors Van Zyl Valuers or GVZ 88.5 Octodec No Par Value Shares for every 100 Premium Linked Units; tangible net asset value; the agreement entered into between Octodec and Premium, dated 9 June 2014 regarding the Proposed Transaction and the Capital Restructure; Takeover Regulation Panel, a regulatory body established in terms of section 196 of the Companies Act; Tugendhaft Wapnick Banchetti and Partners attorneys (Firm number 8704), the legal advisors to Octodec and Premium; Van Zyl Valuers CC, (Registration Number 5542), a close corporation incorporated in South Africa and an independent property valuer to Octodec; Vani Chetty Vani Chetty Competition Law Proprietary Limited (Registration number 2007/009553/07), the competition law advisor to the Proposed Transaction; VAT VAT Act VWAP Wapnick Family Value-Added Tax, as provided for and defined in the VAT Act; the Value-Added-Tax Act, 1991 (No. 89 of 1991), as amended; volume weighted average price; and collectively, Jeffrey Wapnick, Sharon Wapnick and persons related or inter-related to them as defined in terms of section 2 of the Companies Act. 12

15 Octodec Investments Limited (Incorporated in the Republic of South Africa) (Registration number 1956/002868/06) Share Code: OCT ISIN Code: ZAE REIT status approved Directors S Wapnick (Non-executive Chairman)* DP Cohen (Lead Independent Director) # JP Wapnick (Managing Director)^ AK Stein (Financial Director)^ GH Kemp # MZ Pollack* PJ Strydom # DL Rose MJ Holmes I Stern * Non-executive director # Independent non-executive director ^ Executive director Octodec Independent Board CIRCULAR TO OCTODEC SHAREHOLDERS AND OCTODEC DEBENTURE HOLDERS 1. Introduction In the firm intention announcement released on SENS on 10 June 2014, Octodec announced its firm intention to acquire all of the issued Premium Linked Units that it does not already own. It is proposed that the Proposed Transaction be implemented by way of the Scheme. Subject to the fulfilment or waiver of the conditions precedent set out in paragraph 3.4.3, including approval of the Proposed Transaction by Octodec Shareholders and approval of the Scheme by Scheme Participants, Octodec will acquire all of the Scheme Linked Units in exchange for Octodec No Par Value Shares, based on the ratio of 88.5 Octodec No Par Value Shares for every 100 Scheme Linked Units held. Premium will subsequently become a wholly-owned subsidiary of Octodec and will be delisted from the JSE. Pursuant to the recent conversion of Octodec to a REIT and for purposes of converting Octodec s capital structure into an equity-only structure, the Octodec Board is proposing: (i) the delinking and cancellation of the Octodec Debentures in terms of the Octodec Scheme; (ii) the Octodec Share Conversion; and (iii) the Amendments to the MOI. In addition, the Proposed Transaction is conditional upon the Increase in Authorised Share Capital being effected to enable Octodec to settle the Scheme Consideration. The delinking and cancellation of the Octodec Debentures is being implemented by way of a scheme of arrangement in terms of section 114(1)(c) of the Companies Act, which required the Octodec Board to appoint an independent expert to provide an opinion on whether the Octodec Scheme is fair and reasonable to Octodec Debenture Holders. The text of the Octodec Independent Expert s opinion letter, which states that the Octodec Scheme is fair and reasonable to Octodec Debenture Holders, is set out in Annexure 2 to this Circular. The Proposed Transaction and the Capital Restructure will require approval of Octodec Shareholders and Octodec Debenture Holders as summarised in paragraphs and 4.4 of the Circular, Octodec has received Linked Unitholder Commitments representing 60.7% of Octodec Linked Units in issue to vote in favour of the Proposed Transaction. The effective date of the Proposed Transaction and the Capital Restructure is anticipated to be 1 September

16 2. Purpose of this circular The purpose of this Circular is to convene the General Meetings and to provide Octodec Shareholders and Octodec Debenture Holders with relevant information relating to the Proposed Transaction and the Capital Restructure, in order for Octodec Shareholders and Octodec Debenture Holders to make an informed decision as to whether or not to vote in favour of the Octodec Resolutions. 3. The proposed transaction 3.1 Background on Octodec and Premium Octodec and Premium are both REITs listed in the Real Estate Investment Trust sector of the JSE. Octodec was incorporated on 4 November 1956 and listed on the JSE in Premium was incorporated on 4 May 1994 and listed on the JSE in Octodec was granted REIT status by the JSE effective 1 September 2013 and Premium was granted REIT status by the JSE effective 1 March Octodec currently owns 14.19% of the Premium Linked Units in issue. The asset management, property management and company secretarial functions for both Octodec and Premium are contracted to City Property, one of South Africa s leading property management companies. With the exception of the Octodec Independent Directors and the Premium Independent Directors that were appointed specifically for purposes of the Proposed Transaction and the Scheme, the Octodec Board and the Premium Board are comprised of the same members. As at the Last Practicable Date, Octodec had a market capitalisation of c.r2.5 billion and Premium had a market capitalisation of c.r2.9 billion. As at 28 February 2014: Octodec s property portfolio comprised of 108 properties with a total GLA of m 2 and a value of R3.4 billion; and Premium s property portfolio comprised of 167 properties with a total GLA of m 2 and a value of R4.7 billion. Both of Octodec and Premium s property portfolios are comprised predominantly of multi-tenanted buildings located in, Johannesburg and surrounding areas. Octodec s property portfolio has historically had a larger exposure to retail assets as a result of its investments in Killarney Mall and Woodmead Value Mart. Octodec and Premium each own 50% of the issued share capital of IPS, an unlisted company that also derives its revenue from its property investments. As at 28 February 2014, IPS property portfolio comprised of 45 properties with a total GLA of m 2 and a value of R1.9 billion. Post the Proposed Transaction, the property portfolio of the Group will comprise of 320 properties, valued at approximately R10.0 billion with the following profile based on rental income per sector: Offices: 20% Retail: 33% Shopping centres: 12% Industrial: 10% Residential: 25% 3.2 Rationale for the Proposed Transaction In recent years, the profiles of Octodec and Premium s property portfolios have become increasingly similar; with both companies having adopted similar strategies of concentrating on high growth areas such as the Johannesburg and CBD s. Given the complementary nature of the property portfolios of Octodec and Premium, and the various services that are shared by these companies, together with the conversion of both companies to REITs, the Octodec Board and Premium Board believe it is an opportune time to implement the Proposed Transaction. 14 The Proposed Transaction will result in the Enlarged Group having a significant residential property portfolio relative to any other REIT that is listed on the JSE. It is anticipated that Octodec will have a market capitalisation in excess of R5.4 billion 1, which should result in the inclusion of the Enlarged Group in the FTSE/JSE SA Listed Property Index 2. The 1 Based on the combined market capitalisations of Octodec and Premium as at the Last Practicable Date, after taking into account Octodec s linked unitholding in Premium. 2 The FTSE/JSE SA Listed Property Index is an index of the top 20 listed property companies by market capitalisation in the Real Estate Investment Service Sector and Real Estate Investment Trusts sector, with a primary listing on the JSE. The index is rebalanced on a quarterly basis, with the first rebalancing after the Proposed Transaction expected to take place in December In terms of the rules governing the Index, if at the date of rebalancing, the Enlarged Group s market capitalisation ranks 17th or higher, then the Enlarged Group will be automatically included into the Index. To the extent that the Enlarged Group s market capitalisation ranks between 18th and 20th, it will only be included to the extent that current constituents are removed from the Index. Current constituents will be removed from the Index if they are ranked 24th or lower by market capitalisation.