Spear REIT has entered into an agreement to acquire The Island Urban Logistics Park in Paarden Eiland, Cape Town, for R185 million from Inospace.
“The acquisition is in line with Spear’s stated strategy to continuously increase portfolio exposure to high quality industrial real estate with a focus on logistics, urban logistics and bulk warehousing within the Cape Town Metropol as a key driver of Spear’s focused – but not rushed – growth plans. The Island acquisition is a natural fit into the Spear portfolio,” commented Spear CEO, Quintin Rossi.
The acquisition further bolsters Spear’s high-quality industrial portfolio with an occupancy of 98% across 247 047m2.
It will be funded via proceeds realised from recent non-core disposals and bank debt. “The acquisition is accretive to the overall Spear portfolio from the transfer date delivering on initial yield to the fund of 9.75%. The Island acquisition has given management a great capital recycling opportunity into a larger, aligned, and high-quality industrial asset,” said CFO, Christiaan Barnard.
Spear’s current assets under ownership are valued at R4.48 billion, an increase of 221% since listing in 2016. Its portfolio currently consists of 30 assets in the Western Cape with the top five (by value) equating to 48% of the total portfolio value and spread across industrial, convenience retail, and commercial real estate in the Cape Metropole.
The Island, 100% occupied by local and international tenants, is one of only a handful of large-scale modern warehousing complexes with roof heights ranging from 11 metres to 14 metres under eaves located in Paarden Eiland, according to Spear’s CIO, Kim Pfaff-Karg.
Spear REIT are set to announce their interim results for FY2023 on the 21st of October 2022.