Group Structure

Covenants of the Company

SA Corporate is governed by the provisions of the Companies Act, the JSE Listing requirements and the REIT legislation in terms of the Income Tax Act. In order to receive a REIT status from the JSE, at least 75% of the revenue reflected in the statement of comprehensive income must be derived from rental revenue, total consolidated liabilities may not exceed 60% of the total consolidated assets and the company must distribute at least 75% of its total distributable profits as a distribution to its shareholders. Furthermore, the Company must have a risk committee who is responsible for adopting and implementing an appropriate risk management policy and may not enter into derivative instrument transactions that are not in the ordinary course of business. A number of criteria must also be met in order for the Company to retain its REIT status.

Property management

Broll and AFHCO Property Management manage the Group’s South African portfolio and our JV partner manages the Zambian portfolio.

Asset management

The Executive provides strategic management of the Group’s assets.

REIT status

The introduction of REITs aligns the South African-listed property sector with internationally traded real estate investments and facilitates the comparison to, and inclusion in, international indices.

This listing as a REIT on the JSE means that the REIT tax dispensation applies to SA Corporate and this offers the following key advantages:

• The net income of the Company is not subject to tax if all distributable earnings are paid to shareholders.
• The Company and its subsidiaries are no longer liable for capital gains tax (“CGT”) on the profit from the sale of properties.
• South African investors receive gross distributions without dividends tax being withheld. The distributions are regarded as rental income and investors pay tax thereon at their applicable marginal income tax rate.
• Foreign investors will be subject to a dividend withholding tax – the current rate of which is 20%. Alternatively the applicable double tax agreement rate will apply.