Texton Property Fund is moving closer to its goal of having half of its portfolio exposed to UK property and half to South African property‚ following a deal announced on Friday.

The company announced that it would acquire two property portfolios underpinned by strong contractual cash flows‚ from the Blend Property Group‚ in a deal worth R863.4m.

The UK portfolio would be acquired for £21.98m (R500.4m) at a yield of 6.95%‚ and the South African portfolio for R363m at a yield of 9.61%.

“The acquisitions comprise quality‚ income-producing properties that complement Texton’s existing portfolio.

"They allow the company to continue to follow its clearly defined strategy of acquiring accretive properties‚ improving the overall quality of the portfolio while diversifying its portfolio beyond the South African borders into the UK‚” the company said.

“The deal means about 45% of our assets will be in the UK. Our goal of being 50% in SA and 50% in the UK will then be closer‚” said CEO Angelique de Rauville.

The UK portfolio includes two office buildings and one industrial building‚ which are all single-tenanted. There are no vacancies in the portfolio and it has an 11.76 year weighted average lease expiry and grants geographic diversification to Texton’s UK-based assets.

In addition‚ this is a unique opportunity to acquire a portfolio of properties “off market” with a further significant and low risk entry into the UK.

The South African portfolio includes office properties. The tenant base consists of 51% national and or multinational tenants‚ with a weighted average lease expiry of 4.3 years and average escalations of 7.6%.

source" BDpro