Listed property loan stock company Spearhead Property Holdings aims to double the size of its property portfolio in the next two years.

Spearhead, which has delivered annual compound distribution growth of 13% since its listing in 1999, has bagged about R1,5bn worth of properties in its portfolio.

Spearhead CEO Mike Flax said on Friday the portfolio should be worth R3bn by June or July 2008.

Flax said growth would come from existing developments currently under construction worth R800m, and R300m worth of property development on the "drawing board".

Flax said the R800m worth of property projects under development include office, retail and industrial parks.

For instance, the company was currently developing a R110m extension to the Knowledge Park office complex at Century City in Cape Town.

Another of these developments was the R200m Sable Square retail outlet mall in Montague Gardens, Cape Town.

The Convention Tower, a 16-storey R250m Cape Town foreshore office block with 18,000m² of office space, was planned for late next year.

Flax said the further R300m worth of development on the "drawing board" included a mix of retail and industrial property development.

"We are also going to continue with our acquisition strategy," he said.

When it listed in 1999, Spearhead had about R300m worth of properties. These properties' portfolio vacancy rate is relatively low.

Flax said his company's vacancy rate was "hovering" at about the 5% level.

He said a lot of the vacancies had been brought in by the company buying vacant space for redevelopment.

Flax said the vacancies on the existing portfolio not under development were much lower, at about 2,5%.

Spearhead on Friday also renewed its earlier cautionary announcement of May 26, saying that the company continued to be involved in discussions which, if successfully concludedmay have a material effect on the price of the company's linked units.

Although Flax could not elaborate further because the company was trading under a cautionary, he was dismissive of market rumours that Spearhead might be taken over by another company.

"We have not yet received a formal offer from anyone," Flax said.

There was speculation recently that large listed property company, Redefine Income Fund, was looking at acquiring Spearhead, along with two other smaller property companies.

Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge