Pretoria - Sycom, the second-largest listed property unit trust, has increased its commercial office investment in the Western Cape with the purchase of R150 million turnkey office development in the Cape Town central business district.

Chris Fleming, an executive director of Sycom, said it would provide the funding for the office block development that would be built on a portion of the old power station site on the Foreshore, next to the new Investec building near the Cape Convention Centre.

Fleming said Sycom would ultimately purchase the completed building from Meridian Property Holdings and Ikwezi Investment Trust, the joint developers who were awarded the tender for the acquisition of the site from the City of Cape Town.

He said this development joined Sycom's four other quality investments in the Cape, including Somerset Mall, N1 City Mall and Noland House, which were acquired at the end of last year and had enabled Sycom to entrench its position as the top rated listed property fund.

The construction contract has been awarded to Murray & Roberts Construction. Work on site has already commenced and the project is scheduled to be completed by October 2004

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Fleming said the acquisition was in line with Sycom's broad strategy to focus on large, quality investments with good tenants on long-term leases.

Designed by Sean Kenealy Architects, the 14-storey wedge shaped building would provide 13 841m2 of office accommodation with 1 686m2 of ground floor retail and similar businesses.

Fleming said it was "an exceptional" Grade A office building, and it was envisaged that the convenience retailing would include banks, restaurants, coffee shops and similar space catering to the needs of the office and nearby convention centre and hotel clientele.

"Sonnenberg Hoffmann and Galombik Attorneys, recently voted South Africa's top large legal firm, has signed a 10-year lease over approximately 7 000m2 with an option to increase this area by another 750m2," Fleming said.

"A further 3 000m2 lease has been signed with a listed company.

"Due to flexibility in the structure of the signed leases and the design of the building, the project can accommodate additional tenancies of up to 6 000m2, in respect of which leasing enquiries have already been received."

Publisher: Business Report