Spear Reit : Voluntary Announcement – Disposal Of 5 Fitzmaurice Avenue

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 5 FITZMAURICE AVENUE

Shareholders are hereby advised that on 20 July 2022, Spear entered into a sale of letting enterprise agreement ("Agreement") with Rex Trueform Group Limited ("Purchaser"), in terms of which Spear will sell the immovable property known as Erf 176024 Cape Town, situated at 5 Fitzmaurice Avenue, Epping ("Property") and the letting enterprise conducted by it on such Property, to the Purchaser for a gross purchase consideration of R85,000,000 ("Disposal").

Shareholders are further advised that the conditions precedent contained in the Agreement have been fulfilled and that the Disposal has accordingly become unconditional.

The Disposal has been concluded at a 2.40% 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 aligns with Spear's capital recycling strategy to invest in larger, longer dated income producing industrial and convenience retail real estate assets within the Western Cape. Market activity has continued to improve, creating attractive capital deployment opportunities for management within well established and attractive nodes in the general Cape Town metropole and greater Western Cape.

Whilst new investment opportunities are being negotiated, management will settle the Company's shorter term variable debt. Spear's fixed debt ratio will increase by 329 bps to 71% of the Company's total debt, in line with management's strategy of hedging between 65% and 75% of the Company's debt at any given time, for periods of between 25 and 36 months. Following the transfer date of the Disposal, Spear's LTV will reduce by 118 bps to 38.29%, further bolstering the Company's balance sheet.

Spear remains on track to achieve its target of 5% to 7% growth in distributable income per share (DIPS), as communicated to the market in May 2022, despite the recent interest rate increases by the South African Reserve Bank.

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

26 July 2022

Sponsor	Legal Adviser
PSG Capital	CDH