Growthpoint to purchase The Paddocks Shopping Centre

Posted On Thursday, 02 December 2004 02:00 Published by eProp Commercial Property News
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Growthpoint Properties Limited will acquire The Paddocks Shopping Centre in Milnerton, Cape Town, for a total purchase consideration of R88,4 million, on a forward yield of around 11%.

Gerald LeissnerDeveloped by Investec Property Group, The Paddocks opened successfully to the public in August this year with anchor tenant SuperSpar on a 10-year lease and Standard Bank and Osiers on 5-year leases.  Leading retailers such as Wimpy, MTN Cellular, Vodacom and Harvey World Travel have taken shops.  A variety of restaurants, including The Dros Restaurant, Mugg ‘n Bean, Wimpy and Cape Town Fish Market Restaurant complement the centre.

“Growthpoint seeks to offer its investors exposure to a sectorally well-balanced, geographically diversified, quality physical property portfolio and The Paddocks fits this investment criteria, while improving Growthpoint’s exposure to the buoyant retail property market in the Western Cape,” said Norbert Sasse, CEO of Growthpoint Properties Limited.

Located in the Royal Ascot development in the growth-belt of Milnerton, The Paddocks is ideally positioned to serve the expanding upmarket residential community and its surrounds.

"The popularity of the West Coast has improved greatly over the last few years and will continue to grow," said Charles Rudman of the City of Cape Town's Planning Department, who is responsible for the Blaauwberg region.

Specifically the larger catchment area of Milnerton, expanding northwards, has shown a 7.25% growth, including the 1 800 new residential units at Royal Ascot. In addition the areas surrounding Milnerton are fairly established, which further increases Milnerton’s popularity as a residential area.

 “Another drawcard for Milnerton as a sought-after residential area is its easy access to the wider metropolitan areas, including Bellville and the Cape Town CBD”, says Rudman.

Enhancing the convenience of The Paddocks is its location within visible distance of the two access roads crossing Diep River in a southerly direction -- the only two points of entry to the Milnerton area from this direction. It is ideally positioned for commuters using Otto du Plessis, Koeberg and Racecourse Roads.

The Paddocks is characterized by the simple square form of the supermarket on the east end, the oval form of the restaurant/entertainment area with its high shop fronts and arched colonnades to allow for views of Table Bay, Table Mountain, The Harbour, Robben Island and Rietvlei on the west end. 

This acquisition of this 8,365m2 shopping centre is a coup for Growthpoint, which had access to this investment property before the rest of the market as a result of Investec Property Group’s asset management of the listed property fund.

Independent advisors Ernst & Young have reported that the acquisition is fair and reasonable to Growthpoint linked unitholders in line with a small related party transaction of this kind.

“Through acquisitions of this kind, Growthpoint continues to enhance the quality, long-term sustainability and growth of the income stream available to linked unitholders,” said Sasse.

The transaction has received Competition Commission approval.

 



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