JSE Listed Sizafika Property Investments Limited, which has been restructured from the shell of knitwear company Adonis, announced today that it has entered into agreements to acquire commercial properties to the value of approximately R400 million.
 
Gearing up for its move to the Real Estate sector of the JSE Limited’s main board, Sizafika has also started negotiating to acquire further properties to the value of approximately R225 million.
 
This is in line with the ‘listing’ strategy of Sizafika which was announced recently by CEO Bryan Smith, who said “the new entity will acquire an initial property portfolio of between R500 and R600 million at an attractive yield of not less than 11%.”
 
The properties both being acquired and under negotiation include offices, retail and industrial premises located throughout South Africa in line with Sizafika’s focus on geographically diverse B- and C-grade office, retail and industrial properties with redevelopment and enhancement potential. Over 50% of the properties which Sizafika has identified for acquisition meet the redevelopment criteria.
 
“Rising land prices and rocketing building costs are making new developments considerably more expensive than the redevelopment and enhancement of existing property stock,” notes Smith. He stresses that Sizafika will purchase properties where management can add value, either by developing existing additional bulk, or enhancing the building and tenant mix, ensuring extra income and improved capital growth.
 
Sizafika is also in negotiation with a BEE group which should acquire equity interest of approximately 15% to 20% in the property company. Furthermore it has appointed Leon van Wyk as financial director and Melvyn Antonie as non-executive director.
 
Sizafika is currently raising capital of approximately R6,9 million through the implementation of a rights offer to linked unit holders, which closes at noon on Friday, 11 August 2006.
 
The approximately R3,2 million share capital of the Adonis listed shell has been restructured and converted into a property loan stock company with linked units. Together with the capital raised in the rights issue, this will provide seed capital of approximately R10 million for Sizafika, to be used to fund the costs of property acquisitions.
 
Once this is achieved, Sizafika will be moved from the JSE Limited Consumer Goods: Personal Goods sub sector to the Financial, Real Estate sub sector. This is expected to take place before the end of September 2006.
 
The acquisitions are subject to various approvals including that of the Competition Commission.
 
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Issued on behalf of Sizafika Property Investments:
Bryan Smith, CEO
T: 011 884 4426
C: 083 300 8888