Sycom grows through development

Posted On Wednesday, 30 March 2005 02:00 Published by Commercial Property News
Rate this item
(0 votes)

LISTED property unit trust Sycom says its strategy of growing its property portfolio through property development as opposed to acquisitions is resulting in higher returns.

Vaal Mall in VanderbijlparkSycom MD Gerald Nelson says few listed property funds are in a position to take advantage of this benefit. He says Sycom is using its in-house property development expertise, and is developing three properties and investigating additional opportunities.

Sycom, which is managed by Grapnel Property Asset Managers, is developing Paarl Mall in Western Cape and Vaal Mall in Vanderbijlpark.

Sycom is also redeveloping two of its existing buildings in Sandton for Discovery Health and is planning the final phase of its commercial property Harrowdene Office Park in Sandton.

Sycom says it has benefited from the higher returns afforded by the managed risk of property development in the past.

These include the development of Somerset Mall and SHG Place in Cape Town, as well as the first five phases of Harrowdene Office Park.

"In addition to providing superior returns, developing is one way of achieving specific investment criteria for an ideal portfolio," says Nelson.

He says that when a portfolio is grown through acquisitions, the purchase is often made at a substantial premium and selection is limited by the availability of properties on the market.

"Investment criteria are frequently compromised and, despite extensive preparation, you can never be completely sure of what you are getting."

He says development carries a longer roll-out period and so a higher risk than acquisition.

But Nelson says this is managed risk. "Sycom will invest in a development only when it is no longer speculative. A minimum pre-let level of about 70% is normally required and all town planning and other development aspects should be fully resolved with all agreements in place."

Last modified on Friday, 14 June 2013 21:38

Most Popular

Growthpoint begins construction of the Kent residential apartments in KZN

Aug 26, 2021
Marius Els, Development Project Manager at Growthpoint Properties
Growthpoint Properties (JSE: GRT) has commenced the development of Kent, its first…

On Auction: Iconic Redevelopment Opportunity in Oranjezicht Cape Town

Aug 26, 2021
The_Lenox
Currently operating as a 43 room guesthouse / backpackers.

On Auction: Spacious offices with multiple amenities in Norwood

Aug 26, 2021
Default Image
Spacious offices with multiple amenities on Auction in Norwood.

On Auction: Retail & Offices Property with unutilised bulk in Rivonia Johannesburg

Aug 26, 2021
KTM_Building
The anchor tenant is Road Adventure Dirt (Pty) Ltd (RAD) which is the premier KTM…

On Auction: Commercial Historical Building in Cape Town

Aug 25, 2021
Cape Town Commercial Property for Sale - 3 Church Street
436sqm Commercial building comprising of retail and office space.

Please publish modules in offcanvas position.