Western Cape-based, JSE- listed property investment and development company, Ingenuity Property Investments Ltd, is acquiring nine additional prime Cape Town properties for a total consideration of around R866million. Transfer is expected on 1 September 2013.
These fully tenanted retail and commercial properties include five buildings in Century City, two in Claremont and two in Tokai and will boost Ingenuity’s property portfolio to over R2billion.
The Century City properties, which are all in prime positions, are Aurecon, the regional headquarters of a global engineering group and the first Five Star Green Star rated building in South Africa; Estuaries 1, which is tenanted by IBM; Gateway, which is tenanted by SMG/BMW motor dealership, Moore Stephens accountancy firm and Symantec; Mazars House, which is tenanted by a global accounting group and the state-of-the-art new generation Virgin Active Health Club.
The other properties comprise a 50% stake in Tokai on Main Office Park and Tokai On Main Shopping Centre with anchor tenants being Fruit and Veg City and Sportsmans Warehouse, a 66,6% stake in Palmyra Junction shopping centre in Claremont and Ingenuity’s head office in Intaba Building in Claremont which they have been renting to date.
The properties have been acquired from the Century City Property Investment Trust (CCPIT), the property investment arm of the directors of the Rabie Property Group, and their partners in the various developments.
Arnold Maresky, CEO of Ingenuity, said the acquisitions would be financed by borrowings and a vendor placement of shares. In part consideration of the sale, CCPIT would be issued with 200million shares at 85c share. “This is a huge vote of confidence from one of the country’s leading developers both in terms of the quality of our portfolio and in Ingenuity’s ability to add value.”
Maresky said they had very close working relationship with the Rabie Property Group, the developers of Century City and the properties now being acquired, and these transactions would further align them strategically and cement their relationship thus providing a pipeline to further investment opportunities. “These acquisitions, which give us a significant entry into the burgeoning Century City mixed use precinct where total investment to date has exceeded around R18billion and which is continuing to outperform the market, will solidify our Western Cape focused investment portfolio. They are all new generation, modern properties with long term leases – with the average lease period exceeding 7 years – and blue chip national tenants which will further enhance and underpin our already strong income stream going forward.” Maresky said the transaction was expected to significantly enhance shareholder value and would improve their ability to enhance dividend distribution.
“The deal also balances the portfolio better and reduces the weighting of development type assets relative to pure income producing investments. The substantial income base allows us to further extract value from existing development opportunities in the Company without having to take on too much debt. Total development opportunities in the fund still exceed R1billion.”
Ingenuity recently completed a third office block in its prestigious Santam office park in Tygervalley at a cost of R215million as well as the R65million redevelopment of Newspaper House in the Cape Town CBD which included transforming the ground floor of the building into a walk through retail mall tenanted by Food Lover’s Market on a 10 year lease. Its latest development, Atlantic Centre, situated in the Culomborg precinct on the Foreshore of Cape Town, is due for completion this month. The total Capital expenditure of this project is R155million. The building will comprise 10 500sqm of premium grade offices.
Rodney Squire-Howe, Chairman of Ingenuity, said this acquisition, which follows the completion of major quality developments over the past five years, was in line with Ingenuity’s strategy to assemble a portfolio of quality Cape properties offering investors an unique opportunity via the JSE.
“We remain focussed in our strategy and continue to invest in the Western Cape. The Company will continue to grow through development and we will target prime income producing buildings that will enhance shareholder value. We are confident that this niched focus will bear fruit for our shareholders,” added Maresky.