JSE-listed property fund Orion Real Estate Limited has purchased the Promenade Shopping Centre and Hotel in Nelspruit.

Acquired from Liberty Life Properties, this is a prime example of a property that is non-core for a larger fund but is ideal for a growing company with an appetite for acquisition. Orion purchased the Promenade Nelspruit for some R33 million at an 18% yield in April. Already this prize asset has been revalued at approximately R60 million.  Orion Real Estate MD Franz Gmeiner explains that this prime retail, hotel and office property fits the Orion portfolio like a glove.

“In the current market good properties in secondary locations offer higher yields than properties in central metropolitan locations and also hold greater potential which can be unlocked via upgrade and renovation programmes,” says Gmeiner.

The fully let 20,000m2 property includes 7,500m2 of retail space with 56 shops featuring anchor tenant Mr Price. It also includes the 4-star, 72-bed Orion Hotel Promenade.  Centrally located on the corner of Louis Trichardt and Henshall Streets in Nelspruit CBD, the Promenade is superbly serviced by public transport, including the nearby train station and offers by 415 parking bays.

Through insight gained from sister company Orion Hotels & Resorts which manages Orion Hotel Promenade, Orion Real Estate has great confidence in the future of Nelspruit as an ideal location for retail property investment. The hotel is trading so successfully that it is responsible for turnover rental in addition to base rental.

“Nelspruit is already well serviced by the conference market and there is a strong drive by the leisure trade seeking either holiday or overnight accommodation as they travel to destinations further afield,” notes Gmeiner.

Orion is confident that the Promenade can benefit from the changing shopper demographic market in the area and other positive factors which are contributing to the growing economy of Nelspruit. Gmeiner believes there is opportunity to create additional retail space at Promenade, thus increasing rental streams, and to further unlocking value through optimal management and leasing.

“It is Orion’s strategy to achieve long-term capital growth through acquiring good property assets and actively undertaking capital development to increase both capital values and grow rental income,” says Gmeiner.

Promenade Nelspruit forms part of Orion Real Estate’s portfolio of landmark properties featuring retail such as Wendywood Shopping Centre in Sandton, Primrose Mall and Primrose Mall Meyers Building in Germiston, Intec House in Marshalltown, Orion Centre in Bedfordview and Devonshire House in Braamfontein.

Having accumulated a portfolio of approximately 40 properties valued at R440 million Orion’s assets are diversified both geographically and sectorally, as part of its strategic risk management. Orion is the result of a reverse takeover of Alpina Property by the Gmeiner family’s Orion Group, resulting in a controlling stake resting with the Gmeiner Family. Over time this stake will reduce to 51% through empowerment transactions and acquisitions for cash and scrip.

Investment in Orion has proven of specific interest to value investors and is set to become a unique entry point to the listed property sector especially for retail investors who wish to benefit from capital growth of properties such as Promenade Nelspruit.

Issued on behalf of Orion Real Estate Limited

Franz Gmeiner, CEO
T: 011 718 6452

By Marketing Concepts
Sandy Davey/Bronwen Noble
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