SA Corporate buys PWC Musgrave building from Old Mutual

Posted On Wednesday, 19 December 2012 11:58 Published by eProp@News
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SA Corporate Real Estate Fund announced that it had entered an agreement to buy the PWC Musgrave Building from Old Mutual Life Assurance Company for R65m in cash.

The acquisition will become effective on transfer of the property, expected to take place during the first quarter of 2013.

"The acquisition of the property is firmly in line with the overall investment strategy of the fund at an initial yield on total cost of 10.43% on the assumption that transfer of the property is registered on March 1 2013," the company said.

The property, a five-storey, A-grade office block in Durban, is fully let to PricewaterhouseCoopers on a triple net lease, with a compound increase of 8% a year. The lease expires on June 30 2015. The building is adjacent to the Musgrave Centre, which SA Corporate also owns.

The acquisition is a "small related party" transaction under the JSE's listing requirements, because SA Corporate and Old Mutual Life Assurance Company have a common asset manager, Old Mutual Property, and Old Mutual Life Assurance Company is an associate of Old Mutual Property.

The acquisition is subject to obtaining the relevant regulatory approvals, and a due diligence investigation within 21 business days from date of signature.

SA Corporate surprised the market in August when it raised its distribution for the six months to June 30 by 5.7%, to 15.17c per unit, despite a 15% fall in headline earnings per unit to 13.18c.

Those results showed a fall in retail rental income, with an increase in vacancies and flat revenue reducing profit.

More recently, the fund caused some concern in the market on Friday, December 7 with the announcement that MD Gerhard van Zyl had resigned.

Mr van Zyl, a former Vukile Property Fund CEO, joined SA Corporate in May, and his resignation made successor Rory Mackey the fund's fifth MD in four years.

Source: BDLive 

Last modified on Wednesday, 19 December 2012 12:02

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