30 Sep - 13 min read

Posting of circular in respect of the distribution for the 2021 financial year

Posting of circular in respect of the distribution for the 2021 financial year

HYPROP INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/005284/06)
JSE share code: HYP ISIN: ZAE000190724
JSE bond issuer code: HYPI
(Approved as a REIT by the JSE)
(“Hyprop” or “the Company”)


This announcement is not for publication or distribution, directly or indirectly, in or into the United States or to any
U.S. person (as defined in Regulation S under the U.S. Securities Act (as defined below)). The distribution of this
announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or
other information referred to herein comes, should inform themselves about and observe any such restriction. Any
failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.


POSTING OF CIRCULAR IN RESPECT OF THE DISTRIBUTION FOR THE 2021 FINANCIAL YEAR


Shareholders are referred to Hyprop’s summarised consolidated audited results for the year ended 30 June 2021, released
on Wednesday, 15 September 2021, wherein shareholders were advised that a dividend of 336.52921 cents per share, for
the year ended 30 June 2021, will be paid to shareholders from the Company’s distributable earnings (“cash dividend”),
and that shareholders will be entitled, in respect of all or part of their shareholdings, to elect to reinvest the cash dividend
in return for additional Hyprop shares through a dividend reinvestment plan (“share reinvestment alternative”), failing
which, they will receive the cash dividend of 336.52921 cents per share.

The number of shares to which shareholders are entitled under the share reinvestment alternative will be determined with
reference to the ratio that 336.52921 cents per share bears to the reinvestment price. The reinvestment price will be
determined by Hyprop by no later than the finalisation date with reference to market conditions at the time, including the
spot price per Hyprop share (less the cash dividend) and/or the volume weighted average trade price per Hyprop share for
up to 30 days prior to the finalisation date (less the cash dividend). The reinvestment price will be announced on the
finalisation date, which will be no later than 11:00 (SA time) on Tuesday, 12 October 2021.

The board of directors of Hyprop may, in its discretion, withdraw the share reinvestment alternative should market
conditions warrant such action. Any such withdrawal will be communicated to shareholders prior to the release of the
finalisation announcement on SENS by 11:00 (SA time) on Tuesday, 12 October 2021.

A circular (“the circular”) providing further information to shareholders in respect of the election between receiving the
cash dividend and receiving Hyprop shares pursuant to the share reinvestment alternative was posted to shareholders who
are residents of South Africa on Thursday, 30 September 2021. A copy of the circular is available on the Company’s website
at https://www.hyprop.co.za/circulars.php.

Shareholders who have dematerialised their shares through a Central Securities Depository Participant ("CSDP") or broker
should instruct their CSDP or broker with regard to their election, in accordance with the terms of the custody agreement
entered into between them and their CSDP or broker.

SALIENT DATES AND TIMES

                                                                                                                      2021
Circular and form of election posted to shareholders on/about, and announced on SENS on             Thursday, 30 September
Finalisation information including the share ratio and reinvestment price per share
published on SENS by 11:00 (SA time) (“finalisation date”)                                             Tuesday, 12 October
Last day to trade in order to receive the dividend (“LDT”)                                             Tuesday, 19 October
Shares trade ‘ex’ dividend                                                                           Wednesday, 20 October
Listing of maximum possible number of shares under the share reinvestment alternative                   Friday, 22 October
Record date to receive the dividend (“record date”)                                                     Friday, 22 October
Last day to elect to receive shares in terms of the share reinvestment alternative or to
retain the cash dividend (no late forms of election will be accepted) at 12:00 (SA time)                Friday, 22 October
Results of cash dividend and share reinvestment alternative published on SENS                           Monday, 25 October
Cash dividend paid to certificated shareholders by electronic funds transfer on or about                Monday, 25 October
Cash dividend credited by CSDP or broker to dematerialised shareholders’ accounts                       Monday, 25 October
Share certificates posted to certificated shareholders (if applicable) on or about                   Wednesday, 27 October
Dematerialised shareholders’ accounts updated with the new shares (if applicable) by
CSDP or broker                                                                                       Wednesday, 27 October
Adjustment to number of shares listed on or about                                                       Friday, 29 October
Notes:
1. Shareholders electing the share reinvestment alternative are alerted to the fact that the new shares will be listed on LDT + 3 
   and that these new shares can only be traded on LDT + 3 due to the fact that settlement of the shares will be three days after 
   the record date, which differs from the conventional one day after record date settlement process.
2. Shares may not be dematerialised or rematerialised between Wednesday, 20 October 2021 and Friday, 22 October 2021, both days 
   inclusive.
3. The above dates and times are subject to change. Any changes will be released on SENS.

FRACTIONS

Trading in the Strate environment does not permit fractions and fractional entitlements. Where a shareholder’s entitlement
to the shares in relation to the share reinvestment alternative gives rise to an entitlement to a fraction of a new share, such
fraction will be rounded down to the nearest whole number with the balance of the cash dividend being retained by the
shareholders.

TAX IMPLICATIONS

Hyprop was granted REIT status by the JSE with effect from 1 July 2013 in line with the REIT structure as provided for in
the Income Tax Act, No. 58 of 1962, as amended from time to time (the “Income Tax Act”) and section 13 of the JSE
Listings Requirements.

The REIT structure is a tax regime that allows a REIT to deduct qualifying distributions to investors, in determining its
taxable income.

The dividend of 336.52921 cents per share meets the requirements of a “qualifying distribution” for the purposes of section
25BB of the Income Tax Act (a “qualifying distribution”) with the result that:

-   qualifying distributions received by South African resident Hyprop shareholders must be included in the gross income
    of such shareholders (as a non-exempt dividend in terms of section 10(1)(k)(i)(aa) of the Income Tax Act), with the
    effect that the qualifying distribution is taxable as income in the hands of the Hyprop shareholder. These qualifying
    distributions are however exempt from dividends withholding tax, provided that the South African resident
    shareholders provided the following forms to their CSDP or broker, as the case may be, in respect of uncertificated
    shares, or the company, in respect of certificated shares:

    -     a declaration that the dividend is exempt from dividends tax; and
    -     a written undertaking to inform the CSDP, broker or the company, as the case may be, should the circumstances
          affecting the exemption change or the beneficial owner cease to be the beneficial owner,

    both in the form prescribed by the Commissioner for the South African Revenue Service. Shareholders are advised
    to contact their CSDP, broker or the company, as the case may be, to arrange for the abovementioned documents to
    be submitted prior to payment of the dividend, if such documents have not already been submitted.

    Shareholders who are South African residents are advised that in electing to participate in the share reinvestment
    alternative, pre-taxation funds are utilised for reinvestment purposes and that taxation will be due on the total cash
    dividend amount of 336.52921 cents per share.

-   qualifying distributions received by non-resident Hyprop shareholders will not be taxable as income and instead will
    be treated as ordinary dividends which are exempt in terms of the usual dividend exemptions per section 10(1)(k) of
    the Income Tax Act. Any qualifying distribution is subject to dividends withholding tax, at 20%, unless the rate is
    reduced in terms of any applicable agreement for the avoidance of double taxation (“DTA”) between South Africa
    and the country of residence of the shareholder. Assuming dividends withholding tax will be withheld at a rate of
    20%, the net dividend amount due to non-resident shareholders is 269.22337 cents per share. A reduced dividend
    withholding rate in terms of the applicable DTA, may only be relied upon if the non-resident shareholder has provided
    the following forms to their CSDP or broker, as the case may be, in respect of uncertificated shares, or the company,
    in respect of certificated shares:

    -     a declaration that the dividend is subject to a reduced rate as a result of the application of a DTA; and
    -     a written undertaking to inform their CSDP, broker or the company, as the case may be, should the
          circumstances affecting the reduced rate change or the beneficial owner ceases to be the beneficial owner,

    both in the form prescribed by the Commissioner for the South African Revenue Service. Non-resident shareholders
    are advised to contact their CSDP, broker or the company, as the case may be, to arrange for the abovementioned
    documents to be submitted prior to payment of the dividend if such documents have not already been submitted, if
    applicable.

    Non-resident shareholders are further advised that in participating in the share reinvestment alternative, post dividend
    withholding tax funds are utilised for reinvestment purposes.

Other information:
-     The ordinary issued share capital of Hyprop is 309 070 057 ordinary shares of no par value before the share
      reinvestment alternative.
-     Income Tax Reference Number of Hyprop: 9425177715.

The cash dividend or share reinvestment alternative may have tax implications for resident as well as non-resident
shareholders. Shareholders are therefore encouraged to consult their tax and/or professional advisors should they be in any
doubt as to the appropriate action to take.

INFORMATION RELATING TO FOREIGN SHAREHOLDERS

The release, publication or distribution of the circular and/or accompanying documents and the right to elect to receive
shares pursuant to the share reinvestment alternative in jurisdictions other than the Republic of South Africa may be
restricted or affected by the laws of such jurisdictions, and a failure to comply with any of those restrictions may constitute
a violation of the securities laws of any such jurisdictions. The shares issued pursuant to the share reinvestment alternative
may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered within Australia, Canada, Hong
Kong or Japan.

United States of America

The Hyprop shares issued pursuant to the share reinvestment alternative have not been approved or disapproved by the U.S.
Securities and Exchange Commission, any state securities commission in the United States or any other U.S. regulatory
authority, nor have any of such regulatory authorities passed comment or opinion upon or endorsed the merits of the share
reinvestment alternative or the accuracy or adequacy of the circular. Any representation to the contrary is a criminal offence
in the United States.

Shareholders who are citizens or residents of the United States are advised that the Hyprop Shares have not been and will
not be registered under the U.S. Securities Act, or under any securities laws of any state or other jurisdiction of the United
States and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly,
within the United States, except pursuant to an applicable exemption from, or in a transaction not subject to, the registration
requirements of the U.S. Securities Act and in compliance with applicable state and other securities laws of the United
States.

Accordingly, the Company is not offering the Hyprop Shares into the United States unless an applicable exemption from
the registration requirements of the U.S. Securities Act is available and, subject to certain exceptions, the circular does not
constitute nor will it constitute an offer or an invitation to apply for, or an offer or an invitation to acquire, any Hyprop
Shares in the United States. Subject to certain exceptions, the circular will not be sent to any shareholder in, or with a
registered address in, the United States. Any person in the United States wishing to receive Hyprop shares must execute
and deliver to the Company an investor letter satisfactory to the Company to the effect that such person and any account
for which it is acquiring the shares is a QIB and satisfies certain other requirements. The investor letter may be requested
or obtained from Hyprop by emailing dripinfo@hyprop.co.za. For the avoidance of doubt, all shareholders located in the
United States are entitled to receive the cash dividend.

Subject to certain exceptions, any person who acquires Hyprop Shares will be deemed to have declared, warranted and
agreed, by accepting delivery of the circular, the share reinvestment alternative, selling or renouncing their Hyprop Shares
or accepting delivery of the Hyprop Shares that it is not, and that at the time of acquiring the Hyprop Shares, it will not be,
in the United States or acting on behalf of, or for the account or benefit of, a person on a non-discretionary basis in the
United States or any state of the United States.

In addition, until 8 December 2021 (40 days after posting of the certificated shares and updating the accounts of
dematerialised shareholders with the new shares), an offer, sale or transfer of the shares within the United States by a dealer
(whether or not participating in the share reinvestment alternative transaction) may violate the registration requirements of
the U.S. Securities Act.

European Economic Area and United Kingdom

In relation to each member state of the European Economic Area and the United Kingdom (each a “Relevant State”), with
effect from and including the date of the circular, no shares have been offered pursuant to the share reinvestment alternative
to the public in that Relevant State. The offer of shares pursuant to the share reinvestment alternative contemplated by this
circular may not be made to the public in that Relevant State except that an offer to the public in that Relevant State of any
shares pursuant to the share reinvestment alternative may be made at any time under the following exemptions under the
Prospectus Regulation:

(A)   to any legal entity which is a qualified investor as defined under the Prospectus Regulation;
(B)   to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation),
      as permitted under the Prospectus Regulation; or
(C)   in any other circumstances falling within Article 1(4) of the Prospectus Regulation,

provided that no such offer of shares pursuant to the share reinvestment alternative shall require the Company to publish a
prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the
Prospectus Regulation.

For the purposes of this provision, the expression an “offer to the public” (and similar expressions) in relation to any shares
offered pursuant to the share reinvestment alternative in any Relevant State means the communication in any form and by
any means of sufficient information on the terms of the share reinvestment alternative and the shares to be offered pursuant
thereto so as to enable an investor to decide to purchase or subscribe for any shares pursuant to the share reinvestment
alternative, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.

Any person located in any Relevant State that elects to receive any shares pursuant to the share reinvestment alternative,
will be deemed to represent, warrant, agree and confirm that they are a qualified investor as defined under the Prospectus
Regulation. Any person located in any Relevant State that wishes to receive shares pursuant to the share reinvestment
alternative is requested to contact the Company by emailing dripinfo@hyprop.co.za. In the case of any shares pursuant to
the share reinvestment alternative being acquired by a financial intermediary as that term is used in Article 5(1) of the
Prospectus Regulation, such financial intermediary will be deemed to have represented, acknowledged and agreed that the
shares acquired by it pursuant to the share reinvestment alternative have not been acquired on a non-discretionary basis on
behalf of, nor have they been acquired with a view to their offer or resale to, persons in a Relevant State in circumstances
which may give rise to an offer of any shares issued pursuant to the share reinvestment alternative to the public other than
their offer or resale in a Relevant State to qualified investors as defined under the Prospectus Regulation.

The Company and its affiliates and others will rely upon the truth and accuracy of the foregoing representation, warranty,
acknowledgement and agreement.

United Kingdom

In the United Kingdom, the circular is only being distributed and communicated to, and any investment or investment
activity to which the circular relates is available only to, and will be engaged in only with, persons: (i) having professional
experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5)
of the Financial Services and Markets Act, 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) who are high net
worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “Relevant
Persons”). Persons who are not Relevant Persons should not take any action on the basis of the circular and should not act
or rely on it. Relevant Persons that wish to receive shares pursuant to the share reinvestment alternative are requested to
contact the Company by emailing dripinfo@hyprop.co.za .

Disclaimer
This announcement does not constitute or form part of an offer to sell securities, or the solicitation of any offer to buy or
subscribe for any securities, to or from any person in the United States (or to, or for the account or benefit of, any such
person or any U.S. person, as defined in Regulation S under the U.S. Securities Act) or in any other jurisdiction in which,
or to or from any other person to or from whom, such offer or solicitation is unlawful. The securities referred to in this
announcement have not been and will not be registered under the U.S. Securities Act, and may not be offered or sold in the
United States or to, or for the account or benefit of, U.S. persons absent registration with the United States Securities and
Exchange Commission or an exemption from registration. There will be no public offer of the securities in the United States.

30 September 2021


Corporate advisor and sponsor
Java Capital

Date: 30-09-2021 04:25:00
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