SA Retail bids for portfolio 
Nick Wilson

RETAIL-focused SA Retail Properties yesterday announced the conditional acquisition of a R1,1bn retail property portfolio, its largest transaction to date since listing in November 2001.

The listed property loan stock company said it had entered into agreements for the conditional acquisition of Sharemax Investments’ portfolio of 14 shopping centres for R1,1bn.

The company said the deal was subject to due diligence by SA Retail, regulatory approval, and the approval of SA Retail linked unitholders and shareholders of Sharemax’s property-owning companies.

It said the transfer was expected to take place in October this year.

SA Retail MD Peter Sparks said the value of the centres ranged from R30m to R250m and that tenants included leading national chains and anchor stores.

Sparks said the properties included a range of convenience, community and regional shopping centres situated predominantly in the major metropolitan areas of SA.

The vacancy factor across the portfolio is less than 2,5%. The transaction, if approved, would boost SA Retail’s portfolio to nearly R3bn from R1,85bn.

“We will probably make a further announcement during August,” said Sparks.

The company said a further announcement would be made at a later date on the financial effects of the transaction on SA Retail.

SA Retail said the acquisition price would be settled by way of an “issue of linked units and/or cash”.

The question now is whether rival listed property loan stock company Hyprop Investments, which owns a 47,6% interest in SA Retail, will favour the transaction.

Hyprop attempted a hostile takeover bid for SA Retail at the end of March last year and, after a protracted battle, managed to secure the 47,6% interest.

If the transaction entails the issue of new SA Retail linked units it could dilute Hyprop’s interest in SA Retail. But the transaction could also involve a cash deal.

Hyprop MD Pieter Prinsloo said yesterday it was “too early to comment” on the proposed transaction. “I would have to look at the quality of the deal to see if it will be earnings-enhancing for SA Retail’s unitholders,” he said.