Shops for Africa Ltd, the JSE-listed property loan stock company which focuses on investing in retail properties serving C and D income consumers, has boosted its portfolio by acquiring a major share in Sammy Marks’ Square, a shopping centre located in a dominant shopping node in the Pretoria CBD.

Shops for Africa said today it had bought portion three of Sammy Marks’ Square, equating to 22,5% of the entire centre, from Spearhead Property Holdings Ltd for R37 million. Of the 21 retailers there, 86% are national, the largest being Joshua Doore, Nu Metro, Russels, Bradlows and Mr Price. The vacancy factor is 1%.

Shops for Africa also announced its acquisition of 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 R57 million. The purchase price represents a 15,3% initial yield.

The square has a total lettable area of 32 657m2 and is divided into three portions. Portion two has a national tenant representation of 62% and is 92% let on a gross rental value basis. A third of the leases expire in 2006, with the major tenant, Woolworths, due for renewal in 2012.

SFA said the acquisition of portion three would enhance distributions per linked unit. Because the acquisition of 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, measuring 7 353m2, from Spearhead would be settled by R24 million in cash and R13 million through the issue of 6 046 512 new SFA linked units.

The R57 million payable to Sycom  by the joint venture purchaser,  which is 50% owned by SFA,  is being funded through a R40,6 million bank loan, with the balance due in three equal annual instalments from the end of the first year following date of transfer.

Anton Botha, managing director of Catalyst Property Asset Managers, which manages the SFA portfolio, says the acquisition of interests in another large centre with a high proportion of national tenants is in line with the company’s aim of buying suitable properties which would increase its JSE market capitalisation and improve tradability and liquidity for its linked unit-holders.

“The acquisition of portion three will increase the national tenant representation in the portfolio to 58%. It will also maintain a favourable lease expiry profile with no more than 25% of leases expiring in any one year.”

Botha says portion three of Sammy Marks‘ Square has a headlease with M & R Properties Ltd over the entire lettable area until April 20, 2005, generating an initial net income yield of 16,9%.

With the Sammy Marks Square deal, Shops for Africa now has a portfolio of 14 properties with a lettable area of 153 205m2.  Other large properties in the portfolio are Golden Walk, Germiston; Maynard Mall in Wynberg, Cape Town; Cleary Park Shopping Centre in Port Elizabeth; and Alberton Mall in Alberton.

ends

ISSUED FOR Shops for Africa Ltd

BY Michael Kerkhoff & Associates

INQUIRIES Anton Botha 021-683-7773/082-466-0732

                   Mike Kerkhoff 021-424-5280