CAPE-based property group Paramount is on another acquisition spree – this time acquiring a mixed bag of properties worth nearly R400m.

In 2004 Paramount showed remarkable nimbleness in snapping up a number of landmark Cape properties.

These included the Golden Acre, the old Swiss Re building (now Paramount Place) in Main Road, Claremont and the Pick 'n Pay building, also in Claremont.

These acquisitions and the latest purchases signal remarkable fighting spirit by a Cape property group largely seen as inferior to market leaders Spearhead and Atlas.

Paramount actually found itself in a squeeze three years ago when its cumbersome corporate structure shaved returns. But then Absa came in as a strategic partner, and to a certain extent emancipated Paramount from its burdensome structure.

After the Golden Acre/Swiss Re/Pick 'n Pay deals most observers believed Paramount would consolidate its interests, especially concentrating on building a Western Cape flavour in its portfolios.

But the latest acquisitions – comprising mainly Cape Town buildings – show Paramount is determined to stay on the front foot.

The new purchases include the Avalon Building (offices) in Cape Town for R26m, the Middestad Mall in Bellville (R100m) and The Terraces (R244m) on the corner of Bree/Waterkant in the Cape Town CBD.

Paramount has also bought the Shoprite Property and the Golden Acre Office Tower on Adderley Street for R101m.

The latest acquisitions should bring the geographical split in Paramount's portfolio to roughly 50% based in the Western Cape.

This forms part of MD Rodney Squire-Howe's policy of continuing to grow the portfolio in line with a strategy of increasing market capitalisation and diversifying Paramount's asset base.

Other key Cape properties on Paramount's book include Edgars Wynberg, Sovereign Quay, Longkloof Studios, Independence Square Ottery, Boston House, Sportsmans Warehouse Bellville, De Waterkant Greenpoint and Sky Park at Airport Industria.

The main issue with Paramount is whether the recent acquisitional splurges will translate into higher quarterly distributions from Paramount.

Sceptics have pointed out that property asset management company Spire – operated by certain Paramount directors – stands to gain the most from managing a bigger property portfolio. Others have asked whether market leaders Spearhead or Atlas would have seriously considered buying these properties.

But it's so far so good for Paramount. The group nudged up its quarterly distribution to 13c/unit in the period ending April 2005. Paramount has maintained a policy of making 'conservative distribution' during the first three quarters and then to 'top up' during the last quarterly payment ending October 2005. At the end of April less than 3% of Paramount's portfolio was vacant – compared to the market average of between 5 to 8%. If Spire Property Services can maintain this vacancy level with the new assets on board, Paramount will be styling into 2006.