Housing Rand Leases

The judgment

The court's own file

competitiontribunal south africa fax form to N von Ey/S Masiye fax Cliffe Dekker Hofmeyr Inc 011 562 1604 Legal Services 44283 Competition Commission ref O1/LM/|Jan11 ; date 03 May 2011 from Tebogo Mputle pages 4 (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 Tebogo Mputle CC: Lerato Monareng - 44088 3” Floor, Mulayo, the dti Campus, 77 Meintjies Street, Sunnyside, Pretoria & Private Bag X24, Sunnyside 0132 Tel: +27 (12) 394 3300 Fax: +27 (12) 3940169 Email: ctsa@comptrib.co.za Website: http:/Avww.comptrib.co.za wf compe titiontribunal yiath ape eee COMPETITION TRIBUNAL OF SOUTH AFRICA In the matter between: Case No:01/LM/Jan11 Housing Impact South Africa Acquiring Firm And Rand Leases Securitisation Target Firm Panel Heard on Order issued on Reasons issued on : NManoim — (Presiding Member) Y Carrim (Tribunal Member) M Mokuena_ (Tribunal Member) 16 February 2011 16 February 2011 03 May 2011 Reasons for Decision Approval [1]On 16 February 2011 the Competition Tribunal approved the acquisition by Housing Impact Fund South Africa of Rand Leases Securitisation (Pty) Ltd. The reasons follow below. The Transaction

[2]Old Mutual Assurance Company (“OMLACSA’) is restructuring its assets and will transfer its 50% shareholding in Rand Leases Securitisation to the acquiring firm Housing Impact Fund South Africa (HIFSA’).

[3]HIFSA which is a newly formed trust established as a vehicle to enable investment into low-income housing projects. Investors in the trust are OMLACSA, which manages the trust, (holding 54.6%), DBSA (32.8%), PIC (11%) and Eskom (1.6%).

[4]The primary target, Rand Leases Securitisation, is a joint venture owned by OMLACSA (50%) and Rand Leases Properties (Pty) Ltd (50%).

[5]Post the transaction Rand Leases Securitisation will be owned by HIFSA (50%) and Rand Leases Property (Pty) Ltd (60%). The Rationale

[6]OMLACSA wishes to dispose of all its assets which will be transferred to HIFSA in order to obtain capital commitments from the investors in the fund. It is envisaged that HIFSA’s total investments will be split into 80% in housing projects and 20% in non-housing projects such as schools, clinics and urban renewal projects. The parties and their activities

[7]As indicated above HIFSA has been created as a housing fund with the view to enable investment into low-income housing projects. HIFSA currently has no interest in any residential development.

[8]Rand Leases Securitisation focuses on the development of low to middle income property. It purchases immovable property which it sells after the property is developed by Rand Leases Property (Pty) Ltd. It currently owns seven projects in Southern Johannesburg, Roodepoort, Bram Fischerville, Krugersdorp, Alberton and Boksburg. The relevant market and the impact on competition

[9]The merging parties’ activities do not overiap horizontally but the transaction will have a vertical impact on the market as HIFSA will, in future, provide finance to Rand Leases Securitisation for the development of its projects.

[10]This will however not raise foreclosure concerns as there are a number of competitors that invest in low-income housing that provide finance for affordable housing projects which compete with HIFSA, such as the major competing banks and the National Housing Finance Corporation. Downstream large competitors such as Group 5, Grinaker, Stefannuti Stocks, Cosmopolitan, South Net and RBA compete with Rand Leases Securitisation in developing low/middle income housing. [11]1n light of the above, we find that the transaction would not substantially prevent or lessen competition in the relevant markets. CONCLUSION

[12]There are no significant public interest issues and we accordingly approve the transaction. | 03 May 2011 YCarim / DATE N Manoim and M Mokuena concurring. Tribunal Researcher: Rietsie Badenhorst For the merging parties: Cliffe Dekker Hofmeyr For the Commission: Lerato Monareng x Date/Time: File No. Mode 7258 Memory TX David 3. May. x OR 2011 15:29 Destination 00715621604 44088 44983 Communication Result Report ( 3. May error ang up or line fail E.2) Bus answer E. 4) No 11 16:34) # x x no Page Not Sent xceeded max. E-mail size compatitiontribunal speak afrien to N-von Ey /S Masiye fax Cliffe Dekker Hofmeyr Inc 011 662 1604 Legai Services 44283 Competition Commission ref OV/LM/Jan11 : date 02 May 2011 from Tebogo Mautie pages 4 (including this page) re Reasons ‘This messaye ls intended onlyfor the use of the addressee ancl may contain informstion thatis and. Wfyou are not the any ijesemination of this oammunicationis ered prohibied. Kyou have recelved this ‘communication in erter, please nolify us immediately by telephone. you are hereby notifiedthat Attached please find the Trihunal’s reasons for the decision in the above matter. Regards Ga Tebogo Mputie GC: Lerate Menareng - 44088 3% Floor, Midayo, the dti Campus, 77 Mzindjins Street, Sunnyside, Pretoria Tak: 427 9213943900 “Faxc +27 (12) 304 0188 Emslk Website: bio! 1 Private Bag X24, Sunnie 0192