These will increase the value of Spearhead’s portfolio by just over 20%.

Spearhead has bought the 25 000m2 Ottery Hypermarket, the office complex 129 Beach Road, Mouille Point (in joint venture with Faircape), and Plum Park, the three-block, 2100m2 office complex in Plumstead.

Flax said that at the prices paid, all the investments should be positive for Spearhead earnings from day one or when conversions are complete.

At 129 Beach Road, Mouille Point, the 7000m2 of office space will be converted and added to, to create 10 000m2 of upmarket apartment space in which units will be sold from prices of about R1,2m to R8m. The converted building will be called “South Seas”. The changes will bring this building in line with several other new upmarket, sea-facing complexes developed recently between Sea Point and the V&A Waterfront, an area that has been radically transformed in the last five years, says Flax.

At the Hypermarket site, said Flax, Pick ‘n Pay’s recently renewed lease still has 29 years to run, and the complex has many excellent tenants, including Ackermans, Pep Stores, Standard Bank, the Post Office, Strandfontein Toyota and Shell.

At Plum Park, a Rabie-developed office complex of 2100m2, completed some five years ago, Rabie have signed a five year lease and will stay on as a tenant, along with international estate agency Remax and Group Five Building (Cape).

Flax said that finance for the purchase is being raised by a new share placement, which will bring in R30m and which, he said, is already over subscribed, and by bank borrowings at interest rates of around 13%.

“We aim to be the dominant Western Cape real estate investment company,” he said. “This has been our goal from the time we listed on the JSE Securities Exchange five years ago. To achieve this, we continually bring better quality buildings into our portfolio and improve the value and appeal of the properties to create win-win situations for all concerned. The process is ongoing - but this latest step is the biggest we have taken to date.”

In the near future, says Flax, he will be releasing news on the upgrading of two further Spearhead properties and on major new investment institutions who have bought into Spearhead, following the latest highly satisfactory results announcement.

“The outlook for the company is good,” he said. “85% of our portfolio is in the Cape where demand, particularly for residential properties, has brought about many conversions from office to residential space of the type we are going to do at 129 Beach Road. This, and the revival of confidence in the CBD, are beginning to put upward pressure on commercial property ventures which will lead to growth being better this year than it has been for some time. The oversupply in industrial space is also now beginning to ease and rental improvements are evident across the market.:”