Transaction is revenue enhancing, increases retail component of portfolio to 31% from 25%

ApexHi Properties Limited (ApexHi) has acquired 14 shopping centres from Shops for Africa for a consideration of R415-million, R240-million of which will be settled in cash and the balance in units at R13,50 per unit.

The acquisition, which is subject to regulatory approval and the approval of the majority of linked unitholders in Shops for Africa, will increase the ApexHi portfolio value from R2,38-billiion to R2,8-billion. The number of properties owned will increase from 223 to 237.

ApexHi CEO Gerald Leissner says the acquisition meets a number of ApexHi's strategic objectives: it will be revenue enhancing; it reduces risk by enhancing the size, diversity and geographic footprint of the portfolio; and it will enhance liquidity. The properties are all located in secondary locations, the niche market in which ApexHi operates.

The lettable retail space in the 14 shopping centres amounts to 146,000m2, and increases ApexHi's retail portfolio to 576,899m2 (31%) from 430,734m2 (25%). The exposure to office space drops from 51,5% to 47,5%, which Leissner says improves the balance of the portfolio and spreads the risk more appropriately.

Key properties include Golden Walk in Germiston, Alberton Mall in Alberton, Maynard Mall in Wynberg, Cleary Park in Port Elizabeth, and Sammy Marks Square, Portion 3, in Pretoria. More than 63% of the tenants are national and regional retailers, with the balance being made up of successful local operators.

The 14 shopping centres are 97% let, and Leissner says their inclusion into the ApexHi portfolio will effectively reduce the total amount of vacant space from 15,1% to 14%.

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