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Tower Property Fund acquires Medscheme building for R110m

Posted On Thursday, 16 October 2014 08:32 Published by
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The Tower Property Fund has purchased the Medscheme building in Florida Glen, Johannesburg, at a cost of R110 million.

Marc Edwards

This three storey office block with a gross lettable area of 7 967sqm, together with 32 semi basement parking bays and 322 shade net covered parking bays, is located at 38 Conrad Street in Florida North and is leased to Medscheme Holdings Proprietary Limited as its administration offices and data centre until 2019 on a triple net contract.

"The acquisition of the Medscheme building is in line with Tower's strategy of targeting good quality properties with solid covenants," says Marc Edwards, CEO of the Tower Property Fund. "The building also further strengthens Tower's portfolio as it adds A grade office space to the existing portfolio and we expect a 10% yield within the first year."

Tower listed on the JSE in July 2013 and has grown the portfolio substantially in just over 14 months. Management are confident of ongoing growth with a strong pipeline of industrial, retail and office properties.

"This pipeline of properties is coming from the private sector where landlords are prepared to take a percentage of Tower shares as currency for the transaction. As Tower is a REIT, holding the shares provides vendors with capital gains tax relief as well as diversification from single property risks," concludes Edwards.

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