Arrowhead Properties and Propertuity have concluded an agreement whereby Arrowhead will acquire eight buildings in the Maboneng Precinct for R180 million. The acquisition, at a forward yield of 11%, is in line with Arrowhead’s strategy of acquiring revenue enhancing properties. The buildings will be managed by Mafadi Property Management, who are specialist managers of CBD properties. The agreement provides for a guaranteed return to Arrowhead of 11% in year one with an 8 % escalation into year two.
Maboneng is a mixed-use urban neighbourhood, east of the Johannesburg CBD, which comprises 40 commercial, residential, industrial and retail buildings. The eight buildings acquired by Arrowhead, with a lettable area of 58 000m², are mainly industrial, with a smaller component being office and retail.
Propertuity is focused on transforming neighbourhoods by designing and developing iconic properties and innovative strategies that create an integrated and uplifted urban environment.
CEO of Propertuity, Jonathan Liebmann, says, “The 2020 vision for Maboneng is for the community to grow to over 20 000 people within 1km² area. We will use the funds from this sale to propel Maboneng into its next development phase.”
It is the intention of Propertuity to further develop and sell properties to Arrowhead. The relationship makes sense in that Propertuity is focused on development while Arrowhead is focused on acquiring developed property with solid yields.
Arrowhead’s overall strategy is to increase its portfolio to R10bn by 2016 through the acquisition of properties that offer attractive yields. It currently owns properties valued at more than R5bn.
Mark Kaplan, COO of Arrowhead, said, “This transaction further reinforces the continued interest in the Johannesburg inner city where regeneration efforts have resulted in improved property values.”