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Property fund adds to assets

Posted On Tuesday, 22 November 2011 02:00 Published by eProp Commercial Property News
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Listed property unit trust SA Corporate Real Estate Fund continues to transform its property portfolio by disposing and acquiring new property assets.

William BrooksPlans to reinvest in upgrades and tenant-driven expansions, acquisition at Raceway Industrial Park in line with investment property strategy.

On Monday the fund said it had entered into an agreement with Basfour 3588 to acquire a distribution facility at Raceway Industrial Park in Gauteng for R415 million.

Early this month the fund entered into an agreement to dispose of seven investment properties worth R492m from various entities within the group to Synergy Income Fund.

SA Corporate said it would use the money in the medium term to invest in high quality properties.

The fund plans to reinvest in certain existing assets though upgrades and tenant-driven expansions.

SA Corporate said on Monday, the acquisition of portion 42 of stand 59 at Raceway Industrial Park was in line with the strategy of the fund to acquire well-let, strategically positioned, high quality investment properties.

It said the property was a well situated, premium distribution facility with first-rate covenants on long leases.

"The node and industrial park environment offers growth potential in a market characterised by a shortage of supply of zoned land and the accessibility of power which impacts on the availability of industrial land for development.

"These factors serve to improve the long-term sustainability of SA Corporate’s income while lowering its distribution risk profile," the fund said.

The property is situated within Raceway Industrial Park, previously known as Gosforth Park, and is next to the Rand Airport and borders highways such as the N17, N12 and N3.

SA Corporate said the acquisition would be financed through debt funding and/or disposal proceeds. The fund said this month the disposal of some assets was in line with its strategy to invest in large, high-quality properties that offered a low risk profile that would support sustainable long- term distribution growth.

The fund, which owns a portfolio of retail, industrial and office properties primarily in metropolitan areas, said the properties it was disposing of were being sold at a weighted average aggregate exit yield of 9,7%.

It will sell Renbro Shopping Centre in Hammanskraal, Pretoria for R107 million and Highland Mews in Witbank for R130 million.

Last modified on Tuesday, 22 April 2014 11:39

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