Dipula Income Fund today announced its intention to acquire a diverse property portfolio for a purchase consideration of R1.27 billion, taking Dipula’s total portfolio value to more than R8.5 billion. The forward yield of the acquisition is 11.7%.
Dipula CEO Izak Petersen says: “This acquisition is in line with our strategy of acquiring quality enhancing properties which offer opportunities to extract additional value through redevelopments and refurbishments. The weighted average lease expiry profile of the portfolio is defensive at over four years, while tenant quality is superb given that 97% of the GLA is let to multinational, national and strong regional tenants.” The acquisition is expected to be yield-enhancing. The portfolio boasts minimal vacancies at 0.8%. The transaction complements Dipula’s existing portfolio of 174 properties valued at approximately R7 billion with a total gross lettable area of 757 363m² including retail, office and industrial properties. In addition to this acquisition, Dipula concluded transactions for quality assets to the value of R277 million during the year. Once all assets have been transferred the portfolio will be worth R8.5 billion.
The portfolio being acquired comprises of two retail properties in Gauteng, Chilli Lane and Chilli on Top, totalling 18 433m²; five office properties across Gauteng and the Western Cape totalling 23 138m²; as well as three redevelopment properties. As part of the same transaction Dipula will also acquire , a 50.1% stake in a portfolio consisting predominantly of industrial properties for a total price of R209 million.
Petersen explains that this is a further step in Dipula’s consistent portfolio growth path which has been more than 300% since listing through portfolio-enhancing acquisitions such as this one. “Once fully implemented we are confident that the liquidity of our shares will improve. The acquisition maintains our emphasis on owning a diversified portfolio and in particular aligns with our commitment to seeking growth through extracting additional value from our portfolio to continue delivering distribution growth.” The expanded portfolio will add further diversity to Dipula’s assets, thereby boosting resilience in a tough economic environment.
The acquisition remains subject to certain conditions precedent.