Brooks adds that mid-sized commuter centres are usually dominant in rural and township nodes and have a formidable mix of national tenants comparable to premium urban centres. “Lower income commuter retail assets in these areas offer defensive qualities, solid lease covenants, good growth and robust trading densities,” says Brooks.
Furthering its aggressive growth strategy and in line with it's specialised retail property fund focus on mid-sized community and small-regional shopping centres, Synergy Income Fund has increased its property assets to R1,7 billion with four significant property portfolio acquisitions in six months since listing on the JSE with property assets of R280 million. The property loan stock company listed on the JSE on 14 December last year with three properties spanning 27,000sqm.
Synergy’s strategy to grow a specialised retail property portfolio is assisted by a partnership with Spar Group anchored and operated centres. Its specialised strategy has secured investment from Liberty Group and Regarding Capital Management, Synergy’s founding investors.
A special general meeting of Synergy linked unitholders approved its acquisition of Gugulethu Square in Cape Town and Setsing Crescent in Phuthaditjhaba, for a total R530 million. The purchase will be funded by a combination of debt and equity funding, and linked unitholders accordingly agreed to a vendor placement of Synergy linked units.
On transfer of its latest acquisition, anticipated in August 2012, its property portfolio will comprise 14 shopping centres covering 177,000sqm.
Besides improving the overall quality of the Synergy portfolio, these acquisitions have broadened its geographic diversity. Synergy now holds properties in Gauteng, KwaZulu-Natal, Western Cape, Free State, Mpumalanga, North West and Limpopo.
Brooks notes the investments all meet Synergy’s criteria of mid-sized commuter centres in high-growth lower LSM nodes. He adds: “Active management of Synergy’s property portfolio, by Synergy’s asset managers Capital Land Asset Management and Spire Property Management, will unlock further value.”
