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Synergy increases its retail portfolio by 50%

Posted On Wednesday, 29 February 2012 02:00 Published by eProp Commercial Property News
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Synergy Income Fund is a specialised retail property fund with a specific focus on mid-sized community and regional shopping centres that are predominantly in the high-growth low-LSM markets as evidenced by its latest acquisitions

William Brooks

In a R530-million deal announced today, the recently listed property loan stock company Synergy Income Fund has increased the value of its retail portfolio by 50% with the purchase of two shopping centres from the unlisted Old Mutual Ideas Fund and associated shareholders.

Synergy also enjoys a close relationship with the SPAR Group and access to its pipeline of new development opportunities.

The acquisition of Gugulethu Square (25 300m2 GLA) in the Western Cape and Setsing Crescent (21 500m2 GLA) in the Free State further strengthen Synergy’s focus on the growth opportunities presented in South Africa’s emerging retail market.

‘We are delighted to be able to announce the conclusion of this deal to acquire two high quality retail assets and through these acquisitions deliver further growth to our investors,’ says Synergy chief executive officer William Brooks.‘We identified these shopping centres for potential acquisition some time ago and when the opportunity arose to make an offer we were ready. Both centres are well located in strong demographic nodes and tenanted to leading national retail groups. We are confident that these investments will deliver sustainable growth to our unit holders.’

The transaction is subject to approval by the seller’s Board of Directors and shareholders, Synergy’s unit holders and the Competition Commission. Funding will be through a combination of debt, and the issue and placement of linked units.

Situated in the heart of Gugulethu outside Cape Town, Gugulethu Square is a newly-built 25 300m2 gross lettable area shopping centre designed by Bentel Architects and developed by the Old Mutual Ideas Fund in 2009. Gugulethu Square is the only formal shopping centre within the greater Gugulethu catchment area and is dual anchored by both a SuperSPAR and a Shoprite supermarket. It is tenanted by all the major national retail groups and has enjoyed strong growth in trading densities since opening.

Setsing Crescent is a 21 500m2 shopping centre located in the town of Phuthaditjhaba, 60km outside Harrismith, in the Free State province. Dual anchored by SuperSPAR and Game, the Setsing Crescent serves a regional community in excess of 360 000 people. Phuthaditjhaba is the centre of the Maluti regional node that includes extensive local industry, provincial and local municipalities, and the QwaQwa campus of the University of the Free State.

‘We will continue to focus our acquisition strategy on the opportunities presented in the emerging retail economy where we are seeing good growth assets. We have built a strong portfolio in this sector with the acquisition of shopping centres in Ulundi, KwaMashu, Elim, Hammanskraal and Witbank. Gugulethu Square and Setsing Crescent will give this portfolio further critical mass and provide our investors with focused exposure to this high growth market,’ says Brooks.

The acquisition of Setsing Crescent and Gugulethu Square brings the Synergy portfolio of shopping centres to 14, representing an average value of approximately R120 million per centre and a total gross lettable area of more than 176 800m2 valued in excess of R1.7 billion.

Last modified on Friday, 18 April 2014 18:40

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