JSE-listed property loan stock company Acucap Properties has entered into an agreement to acquire a further undivided half share in the Bayside Mall in Cape Town from Old Mutual Life Assurance for R280m.
Acucap said on Friday it intended to place linked units with third parties to finance the purchase.
In the event that insufficient linked units were placed to fund the acquisition, the remainder of the purchase price would be funded through a new facility that had been granted by Standard Bank.
If the acquisition was fully funded by the issue of units, Acucap’s gearing would decline to 37%, but if it was fully funded through loans, gearing would increase to 41%.
The group said that should the purchase price be fully debt funded, it would remain comfortably within all of its gearing covenants.
Acucap said there was “strong” demand for property space from national retailers who were under represented in the area, and with an additional 10000m² of approved bulk available, the property would benefit from its ability to attract such tenants.
The mall is situated in one of Cape Town’s highest growth nodes, and its catchment area includes Table View, Parklands, Flamingo Vlei, Sunningdale and West Beach.
Acucap said that with a capacity to grow to just less than 50000m², the mall had the potential to offer a comprehensive retail platform that would cement its position as the primary regional shopping centre in the Atlantic residential corridor.
Traffic circulation and access to the mall were expected to ease with a benefit from the new bus rapid transport system, and this will be complemented by additional structured parking that was planned for the mall.
The group, which already managed the mall, said there would be no incremental administration costs, and its familiarity with the property gave it a high degree of confidence in the quality and sustainability of earnings.
It said the property acquisition was expected to enhance long-term distribution growth for Acucap linked unitholders.
