Delta to acquire Redefine's government tenanted property portfolio

Delta Property Fund (“Delta” or “the Fund”), a specialist black-managed and substantially black-owned REIT with a significant sovereign underpin, today announced that it is in advanced discussions with Redefine Properties Limited to acquire its government tenanted property portfolio.

“We think this acquisition represents a step-change for Delta. Once successfully concluded, the acquisition is expected to be significantly yield accretive. Equally important, the transaction will be settled through the issue of Delta shares to Redefine, which will reduce Delta’s current loan to value ratio,” commented Sandile Nomvete, Delta CEO.

“Delta is one of only a very few listed specialist government funds. We have the know-how, infrastructure and track-record to manage and unlock value from government-tenanted assets exceptionally well. Approximately 54% of our current portfolio by gross lettable area is tenanted by government and we intend to increase this to approximately 60%, whilst reducing our gearing,” Nomvete continued.

An announcement containing full details of the intended acquisition will be published once the terms have been agreed.
Delta last week announced that it has embarked on a strategy to dispose of assets deemed non-core in terms of its strategy.

“The rationale is that certain assets are viewed as non-core, or that the capital from some core assets – where we have received strong offers – can be better deployed in higher yielding assets. The proceeds from these disposals will primarily be used to reduce gearing levels further,” explains Nomvete.

The Fund recently concluded one disposal, with three disposals in progress and 15 properties coming to market with an aggregate asking price of R1.25 billion.