JSE-listed Investec Property Fund Limited recently announced its latest agreements with various vendors, to acquire 9 Commercial Properties worth a total of R452, 9 million.
This variable Loan Stock Company indicated that the purchases in respect of this amount are going to be funded through borrowing and that the acquisitions are ready to be executed with the first ones set for the 1st of October 2013.
The Commercial Properties comprise of the “Martin & Martin” Industrial Property in Kempton Park, with a Gross Lettable Area (GLA) of 19,972m2, the “Bigen Africa” A-grade Office Building in Pretoria with a GLA of 5,545m2, Retail Property in Khayelitsha with a GLA of 2,911m2 and 6 other stand-alone Retail Properties across South Africa with a total GLA of 38,475m2 and 72% of that rental portfolio income coming from Boksburg and Pretoria East.
The properties to be acquired are quite an impressive strategic move for Investec Property Fund Limited in that, there are all ‘fully let’ with long term, triple Net leases with an average escalation of 8%. This means that the portfolio has a healthy long term cash flow, with relatively lower outflows.
According to the Investec Property Fund Limited Team these acquisitions aim to extend the company’s property diversification into retail, industrial and office sectors. Furthermore the move is ultimately a part of the company’s quest to achieving their objective which is to build a portfolio that sustains growth in distributions for its unit holders.
About the Author
Farai is a Property Studies Honours student at the University of Cape Town.
The views expressed in this article are the author’s own and do not necessarily represent the views of Property Wheel