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BEE fund concludes tactical retail property acquisition deals

Posted On Tuesday, 20 December 2011 02:00 Published by
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Dipula Income Fund (JSE:DIA/DIB) announces a R247,8 million acquisition of three strategic retail properties

Izak Petersen

Increasing its retail portfolio exposure to low-income households, which are expected to outperform higher-income households in terms of growth in the short- to medium-term, Dipula has concluded an agreement to acquire Bochum Plaza and Blouberg Plaza, adjacent retail centres totalling some 12,500sqm both in Bochum, Limpopo, and the 15,000sqm Nquthu Plaza in Nquthu, KwaZulu-Natal.

Bochum and Blouberg Plaza are situated near a commuter taxi rank and anchor tenants include Pick ‘n Pay and Cashbuild. Nquthu Plaza is anchored by Shoprite and Cashbuild. Both properties are 100% let.

“These strategic acquisitions will grow Dipula’s portfolio and achieve the increased quality, average size and geographic diversification of our portfolio,” says Dipula Income Fund CEO Izak Petersen.

Dipula Income Fund, which offers an A and B unit structure, listed on the JSE in August 2011 with excellent BEE credentials thanks to a black-owned asset manager, a sizable stake in the fund by management and a highly acquisitive growth strategy targeting income-enhancing assets.

The company owns a diversified property portfolio, located throughout South Africa, with a retail bias to low income households. The Dipula portfolio consists of over 170 properties representing good sectoral and geographical diversification.

The new acquisitions will grow the portfolio to 178 properties valued at in excess of approximately R2.3 billion and spanning a total of 463 000sqm.

For good continuity and an excellent track record, McCormick Property Development, developer of all three properties in the transaction, and will continue as appointed property and rental manager of these properties.

The acquisitions remain subject to a number of conditions, including Competition Authorities approval and Dipula securing financing, which may be done by way of debt or equity funding.

“We continue to build a portfolio that will deliver capital appreciation and annuity income growth to investors in the long-term, while increasing our critical mass, asset quality and diversification. These acquisitions will have financial effects on Dipula’s performance, which will be announced in due course,” notes Petersen.

Last modified on Friday, 18 April 2014 15:19
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