Shops for Africa acquires major share in centre

Posted On Monday, 26 May 2003 02:00 Published by eProp Commercial Property News
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SHOPS for Africa, a listed property loan stock company on the JSE Securities Exchange SA, said at the weekend it had acquired a major share in Sammy Marks' Square, a shopping centre located alongside the State Theatre in the Pretoria central business district.

Anton BothaShops for Africa (SFA), which focuses on investing in retail properties serving medium to lower-income consumers, announced on Friday it had bought portion three of Sammy Marks' Square, or 22,5% of the centre, from Spearhead Property Holdings for R37m.

 Of the 21 retailers there, 86% were national the largest being Joshua Doore, Nu Metro, Russels, Bradlows and Mr Price. SFA said the vacancy factor was 1%.

 SFA also said it had acquired a 50% indirect interest in portion two of Sammy Marks' Square, representing 54,3% of the centre. Portion two was bought by a joint venture company from Sycom Property Fund for R57m, which represented a 15,3% initial yield.

 SFA said the square had a total lettable area of R32657m², and was divided into three portions.

 Portion two had a national tenant representation of 62% and was 92% let on a gross rental value basis. A third of the leases would expire in 2006, with major tenant Woolworths due for renewal in 2012. SFA said that the acquisition of portion three would enhance distributions per linked unit.

 Since portion two would be accounted for as an investment in an associate, it would not have a material effect on earnings, distribution or net asset value of linked units in the short term.

 The acquisition of portion three from Spearhead would be settled for R24m in cash and R13m through the issue of 6046512 new SFA linked units.

 The R57m payable to Sycom by the joint venture purchaser, which was 50% owned by SFA, was being funded through a R40,6m bank loan, with the balance due in three equal annual instalments. Anton Botha, MD of Catalyst Property Asset Managers, which manages the SFA portfolio, said the acquisitions were in line with the company's policy of buying suitable properties which would increase its market capitalisation on the JSE.

 Botha said SFA's market capitalisation was R140m.

 Botha said they were confident the Pretoria CBD would remain a buoyant shopping area. "It's born e out by the performance of the retailers at Sammy Marks and in other nearby properties."

 He said a reason for the relative strength of the area was that there were a lot of government employees working there.

Last modified on Monday, 05 May 2014 16:24

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