Hartman Professional Enterprises C.C. Reg. No.: 1994/032195/23 PO Box/ Posbus 7615 BIRCHLEIGH 1621 Tel: (011) 976-2838 Fax: (011) 976-2608 E-mail: firstname.lastname@example.org MARKET VALUATION OF VARIOUS PORTIONS OF THE FARM WATERKLOOF 305, JQ, RUSTENBURG LOCAL MUNICIPALITY, NORTH WEST PROVINCE Agricultural land to be developed as Township MARKET VALUE : R156,000,000 Proclaimed township REPLACEMENT COST : Nil. VALUATION DATE : 2 July 2007 Valuation Job No. 55-2007 Valuer S F van Huyssteen Consultant Johan Matthee Tel Number (011) 976-2838 Tel Number (012) 344-0566 Cell Number (082) 452-2246 Cell Number (082) 901-6614 Fax Number (011) 976-2608 E-mail E-mail email@example.com HARTMAN PROFESSIONAL PROPERTY VALUATION THIS VALUATION REPORT HAS BEEN PREPARED ON INSTRUCTIONS RECEIVED FROM JOHAN MATTHEE DATED 21 JUNE 2007. 1. GENERAL Building Name/Applicant : Born Free Investments 552 (Pty) Ltd. Property Street Address : Situated next to the Platinum Boulevard. Suburb & City : JQ, Rustenburg Local Municipality, North West Province. Date of Inspection : 26 June 2007. Date of Valuation : 2 July 2007. Purpose of Valuation : Market value. Definition of Value : The definition of ‘Market Value’ as laid down by the International Valuation Standards Committee is: “The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.” 1. They should be in a position to enter into a contract (financially and legally); 2. They negotiate on equal terms; 3. They are both well informed about the property and all it’s potentialities, as well as about the market for such properties (i.e. they are as well informed as the person who has taken all reasonable steps to obtain this information; 4. They are not under pressure (i.e. they are not forced to buy or sell a property within a limited time); and 5. They negotiate the transaction rationally. When we analyse these features, it becomes clear that a ‘real’ person could seldom comply with all of them. The valuer must therefore distance himself from the personalities concerned and imagine a hypothetical transaction in which both the buyer and the seller have the understanding and motivations that are typical of the market for the property or interests being valued [Minister of Water Affairs v Mostert 1966 4 SA 690 (A) 722c]. This definition of value holds true in the case of the subject properties. 2. TITLE DEED INFORMATION We have had sight of the relevant Title Deeds which indicates that the properties are held as follows: Registrar : Pretoria. Title Deed No : T3826/2001. Registered Owner : Anton Pretorius Trust. Title Deed Description : Portion 137 of the farm Waterkloof 305, JQ, Rustenburg Local Municipality, North West Province. Registration Division : JQ. Site Area : 4.2827ha Purchase Price : R200,000. Purchase Date : 27 November 2000. MUNICIPAL VALUATION According to the current Municipal Valuation Roll dated 2 January 2003, the subject site has not yet been valued for Municipal Rates and Tax purposes and no fees are payable. 4. PURCHASE DETAILS Purchaser : Born Free Investments 552 (Pty) Ltd. Purchase Price : The total amount for the site assembly is R60,855,226. Date of Sale : 19 January 2007. Legal Status : We have had sight of the signed Deeds of Sale. 5. LOCALITY 5.1 MACRO AREA The site is situated east of the P16-1 road between Rustenburg and Johannesburg, extending southward from approximately 700 meters south of the Rustenburg Mall and approximately 1.2 kilometers from the intersection with the N4. The site is approximately 3 kilometers south-east of the Rustenburg CBD and in close proximity of new commercial and residential developments. 5.2 MICRO AREA The site is situated to the east of the P16-1 road between Rustenburg and Johannesburg, approximately 700 meters south of the Rustenburg Mall. Easy access to the property may be gained from the N4 turning south onto the P16-1 to Johannesburg. 6. DESCRIPTION OF PROPERTY 6.1 HIGHEST AND BEST USE The highest and best use will be the development of private townships. The current owners have commenced the process. 6.2 SITE The property is irregular in shape and slopes slightly to the east. Soil conditions appear stable and the area is not under mined. 6.3 IMPROVEMENTS Primary Use : Agricultural land to be developed as township. IMPROVEMENTS Several dwellings and structures exist on the site. The proposed townships, Waterkloof East and Waterkloof East Extension 1, do not plan the incorporation of these improvements into the future layout and we have consequently ignored these improvements as a potential value forming attribute of the property. The highest and best use of the site assembly is that of land with potential for township development of up-market residential stands. In view of this use, all improvements are considered economically and functionally obsolete. 6.4 LETTABILITY Vacant land. Not lettable. The dwellings are currently occupied by the previous owners. 6.5 SALABILITY Vacant land. A high demand exists for land in this area as a result of the close proximity to the Rustenburg Mall as well as the Platinum Mines in the Rustenburg area. We consider salability as good. 7. LEASE ANALYSIS We understand that the property is owner occupied and are unaware of any formal leases that may influence this valuation. We reserve the right to review in the event of any lease. 7.1 RISK PROFILE 7.1.1 Tenant Classification Owner occupied. Stable. 7.1.2 Expiry Profile Owner occupied. Stable. 8. VALUATION METHOD Comparable sales method. Comparable sales are registered sales in the same area or in similar areas in recent times, such similar areas should not be too far away from the subject property and such comparable sales should be long arm transactions (not forced sale transactions) between a willing seller and a willing buyer. 9. MARKET RESEARCH & APPLICATION 9.1 COMPARABLE SALES • The Remaining Extent of Portion 393 of the farm Waterkloof 305, JQ, was sold on 30 August 2006 for a consideration of R2,100,000. The property measures 2.0262 hectares and improvements are considered obsolete. A unit value of R1,036,422 per hectare was achieved. The property is further away from the Rustenburg Mall and the transaction is old. • The Remaining Extent of Portion 309 of the farm Waterkloof 305, JQ, was sold on 6 December 2006 for a consideration of R3,500,000. The property measures 3.9423 hectares and improvements are considered obsolete. A unit value of R887,806 per hectare was achieved. This property is much further away from the Rustenburg Mall. This is also considered an old transaction. The analysis of historical comparable sales above as well as the sale of the subject site assembly at an average unit value of approximately R1,600,000 per hectare, an analysis of more recent transactions in the greater Hartebeestpoort Dam area and consultations with developers, brokers, property owners, landlords and tenants indicate achievable unit values for agricultural land with township development potential at between R1,800,000 and R2,000,000 per hectare. Higher unit values are achievable for land closer to up-market residential and business developments, as this is considered prime property. 9.2 CONCLUSION After consideration of specific location, size, use, soil condition and adjustment for time, we conclude that an achievable selling price of R2,000,000 per hectare for agricultural land with potential for township development will be achievable in the market in respect of the subject site assembly. We have ignored all improvements as potential value forming attributes of the properties in our calculations. Further analysis of the sales of comparable “Residential 2” erven in nearby residential townships indicates current unit values of approximately R600 per m². We have adopted this figure for the purposes of a projected valuation of the site, as if already proclaimed as a township. 10. VALUATION CALCULATIONS We value as follow: All properties jointly as proclaimed “Residential 2” land - 259,230m² @ R600/m² =R155,538,000 SAY R156,000,000 CERTIFICATE I, Stephanus Ferreira van Huyssteen, assisted by Heinrich Norden Hartman, declare that I have inspected Various Portions of the farm Waterkloof 305, JQ, Rustenburg Local Municipality, North West Province, that I have verified the particulars set out in this valuation, and that I value the herein described property/ies for the purposes of this valuation to the best of my knowledge and skill at today’s date to be: R156,000,000 as if proclaimed “Residential 2” land (ONE HUNDRED AND FIFTY SIX MILLION RAND) SIGNED: H N HARTMAN SIGNED: S F VAN HUYSSTEEN PROFESSIONAL VALUER CANDIDATE VALUER REGISTRATION NO.: 1744 REGISTRATION NO.: 6041 2 July 2007 ADDRESS: Hartman Professional Enterprises Reg. No.: 1994/032195/23 PO Box/ Posbus 7615 BIRCHLEIGH 1621 CAVEATS 1. This valuation has been prepared on the basis that full disclosure of all information and factors which may affect the valuation has been made to ourselves, and we cannot accept any liability or responsibility whatsoever for the valuation, unless such full disclosure has been made. 2. We emphasize that we have not carried out a structural survey of the improvements, nor have we examined them for signs of timber infestation, and accordingly cannot be held responsible for possible defects. 3. Where actual income and expenditure data has been made available to us, such data has been adjusted for anomalies and used on the understanding that it is correct as a basis for assessing capitalised values; in the absence of such data, we have made what we consider to be plausible assumptions. 4. This valuation has been prepared on the understanding that no onerous easements, rights of way or encroachments exist by or on the subject property, other than those in favour of statutory bodies, applicable to all such properties, or which could be regarded as customary. 5. The market value and any other values referred to in this report exclude Value Added Tax (VAT) and transfer costs. 6. Finally, we must point out that neither the whole nor any part of this valuation, nor any reference thereto, may be included in any document, circular or statement, without the prior written approval of the Valuer of the form and content in which it is to appear.