LISTED property loan stock company Paramount Property Fund (Paraprop) said yesterday it had acquired the Pick 'n Pay centre in Claremont, Cape Town, from Sanlam Life Assurance for R67m.

Paraprop said the acquisition was in line with its strategy of continuing to grow its property portfolio to increase market capitalisation, improve its capital structure and benefit from increased diversification.

Finance director Fred Jenkings said yesterday that with this acquisition Paraprop's assets had now breached the R1bn mark.

Jenkings said that the only suspensive condition outstanding was approval from the Competition Commission.

Paraprop said the landmark eight-storey building comprised 16521m² of lettable space.

The tenants include Pick 'n Pay, which has both its flagship store and its head office in the building.

The Pick 'n Pay head office lease will run for another two years and Jenkings said there was talk in the market the office would be moving, although the Pick 'n Pay store would remain.

Paraprop said the expected move of the head office, together with a lot of unutilised bulk on the site and the completion of the Claremont ring road, would create significant redevelopment potential.

"Once that takes place (the completion of the ring road) we believe it will enhance the value of this site."

In terms of the deal, R51,6m of the price would be funded through the placement of 15-million Paraprop units issued at R3,44 a unit. The remainder would be through borrowings.

Meanwhile, property loan stock company Redefine Income Fund has purchased 6,03-million Paraprop units at R3,50 a unit, increasing its stake in Paraprop to 24% of the units in issue.