Redefine Rowmoor

The judgment

The court's own file

competitiontribunal south afvica fax form to Vani Chetty fax 011 880 5773 Vani Chetty Competition Law (Pty) . Ltd Legal Services 44283 Competition Commission ref 41/LM/May11 date 11 July 2011 from Abigail Mashigo pages 5 (including this page) re Reasons This message is intended only for the use of the addressee and may contain information that is privileged and confidential. If you are not the intended recipient, you are hereby notified that any dissemination of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately by telephone. Attached please find the Tribunal’s reasons for the decision in the above matter. Regards fad Abigail Mashigo CC: Mogalane Matsimela- 44303 30 Floor, Mulayo, the dti Campus, 77 Meintjies Street, Sunnyside, Pretoria & Private Bag X24, Sunnyside 0132 Tek +27 (12) 394 3300 Fax: +27 (12) 3940169 Email: ctsa@comptrib.co.za © Website: http:/Avww.comptrib.co.za Ce cestpetitiontribunal vowrh afe tea COMPETITION TRIBUNAL OF SOUTH AFRICA Case No: 44/LM/MAY11 In the matter between: REDEFINE PROPERTIES LTD Acquiring Firm And ROWMOOR INVESTMENTS 567 (PTY) LTD Target Firm IN RESPECT OF THE PROPERTY LETTING ENTERPRISE KNOWN AS “SANIMY MARKS PORTION 2” Panel : Norman Manoim (Presiding Member) Yasmin Carrim (Tribunal Member) Andreas Wessels (Tribunal Member) Heard on : 06 July 2011 Order issued on : 06 July 2011 Reasons issued on : 11 July 2011 Reasons for Decision Approval

[4]On 06 July 2011, the Competition Tribunal (“Tribunal”) approved the transaction involving Redefine Properties Ltd and Rowmoor Investments 567 (Pty) Ltd in respect of the property letting enterprise known as “Sammy Marks Portion 2”. We explain below our reasons for this conclusion. Parties to the transaction

[2]The primary acquiring firm is Redefine Properties Ltd (“Redefine”), a public company incorporated in accordance with the laws of the Republic of South Africa. Redefine is not controlled by any single shareholder. It controls in excess of nineteen subsidiaries.

[3]The primary target firm is the property letting enterprise known as “Sammy Marks Portion 2” owned by Rowmoor Investments 567 (Pty) Ltd (“Rowmoor’). Rowmoor is incorporated in accordance with the laws of the Republic of South Africa. Proposed transaction [4]In terms of the proposed transaction, Redefine intends to acquire from Rowmoor the property letting enterprise known as “Sammy Marks Portion 2”, a rentable retail space. Redefine pre-merger owns portions 1 and 3 of Sammy Marks Square. Pursuant to the proposed transaction Redefine will thus own portions 1, 2 and 3 of Sammy Marks Square, hereinafter collectively referred to as “Sammy Marks Square”.

[5]Simultaneously with the above, the parties to the merger have concluded a Sale of Shares Agreement in terms of which Redefine will purchase all the shares held by Rowmoor in Sammy Marks Square Management Company (Pty) Ltd, which pre-merger is jointly controlled by Redefine and Rowmoor. Redefine will perform its own property management of Sammy Marks Square once it acquires sole control of Sammy Marks Square Management Company (Pty) Ltd. Rationale for transaction

[6]Since Redefine pre-merger owns portions 1 and 3 of Sammy Marks Square, it wishes to consolidate its interest in the complex by acquiring portion 2.

[7]The proposed deal will allow Rowmoor to consider new investment opportunities. Nierging parties’ activities

[8]Redefine is a property loan stock company. Its property investments are diversified across all sectors of the rental property market including rentable retail space, rentable office space and rentable industrial space.

[9]As stated above, Sammy Marks Square is a rentable retail space. It is situated in the Pretoria Central Business District (“CBD”). Competition assessment

[10]As is evident from the above, the activities of the merging parties horizontally overlap in regard to rentable retail space in Pretoria. [11]In assessing the market for the provision of rentable retail space, the Competition Commission used the Independent Property Databank’s (IPD) retail property classification of potential subsectors. The IPD classifies various shopping centres, based mainly on gross lettable area (GLA), infer alia as follows:' Super regional T> 100 000 m¢ Major regional 50 000 m?— 100 000 m? Minor regional 25 000 m?— 50 000 m? Community centre 12 000 m?— 25 000 m? Neighbourhood centre 5 000 m*— 12 000 m* Local convenience centre 1 000 m?— 5 000 m?

[12]Sammy Marks Square portions 1 and 3 are 11 700 m? combined; portion 2 is approximately 17 745 m?. Combined, these three portions thus represent >25 000 m? of rentable retail space and therefore is classified as a minor regional centre. According to the merging parties’ submissions, these portions “co- exist as if the centre is a single shopping centre”. a2 t See Competition Commission's Recommendation pages 7 and 8. 2 See page 99 of the record. 3 {13] However, the precise scope of the relevant product and geographic markets may be left open in this case since the proposed merger raises no competition concerns in any market delineation context.

[14]The Redefine group does not pre-merger own any other minor regional centres within a 15 km radius of Sammy Marks Square.® If the market is defined more broadly then there is an overlap between the activities of the merging parties since the Redefine group does own other rentable retail space in the Pretoria CBD. The post-merger market share of the merged entity however remains low in any potential relevant market. Therefore, we conclude that the proposed transaction is unlikely to lead to any substantial prevention or lessening of competition in any relevant market. Public interest

[15]The merging parties submitted that no job losses would result from the proposed transaction.* The proposed deal raises no other public interest issues. Conclusion

[16]Based on the above, we conclude that the proposed transaction is unlikely to lead to a substantial prevention or lessening of competition in any relevant market. Furthermore, no public interest concerns arise from this deal. Accordingly the proposed transaction is approved unconditionally. a = 44 July 2011 ANDREAS WESSELS DATE Norman Manoim and Yasmin Carrim concurring Tribunal researcher: Tebogo Hlafane For the merging parties: Vani Chetty Competition Law For the Commission: Mogalane Matsimela 3 See inter alia page 109 of the record. 4 See inter alia pages 9 and 109 of the record. 4 Date/Time: {1. Jul. 7452 Memory 1X abigall x xX x 2011 16:35 Destination 00118805775 44983 44503 Communication Result Report ( 11. Jul. 201 for error y Hans up or Tine fail 2) Busy o answer [4) No # imi : 5) Exceeded max. E-mail size ) No facsimile connection competitiontribunal epurh africn Sax form to Vani Chetty fax 014 B88 5773 Vani Chetty Competition Law (Pty) Lid Legal Services 44283, Competition Commission ref At iLiiMay11 date 41 duly 2014 from Abigail Mashigo pages 5 (including this page) re Reasons 3” Fioor, Mulays, the df Gunspus, 77 Meinties Strest, Sunnyside, Pretoria Tek: #27 (12) 3894 3300 Fax +27 (12) 3940169 Emeik cteageomptib.enza Websii: htpy/nwn.cimptrib.co.28 ‘This mesmageis Intended only forthe wee of the addressee und may contain infarmatianteat is privieged nd confidental, If you are not the intended recipient, you are hereby notified frat amy ination of this: ication Is strictly prohibited. Ifyou have receivedthis ‘ommunication in error, please notifyvs immediately by telephone. Attached please find the Trivunal's reasons for the decision in the above matier. Regards Abigail Mashigo CC: Magalane Matsinela- 44303 DA Private Bag 3024, Sunnyside 0182