New Acquisitions for Tower Property Fund

New Acquisitions for Tower Property Fund

Tower Property Fund has announced the pending transfer of R480-million worth of properties into the fund’s portfolio, with transfer expected to be finalised by the end of April.

The first office building is Unit 4 of Whitby Manor Office Estate, which is situated just off the M1 motorway in Gauteng and which was purchased for R51-million. The second office-building purchase, at a cost of R192-million, consists of the majority of sections of the Sunclare office block, which is located on the corner of Protea Road and Dreyer Street in Claremont, just across the road from Cavendish Square.

“Tower has purchased the majority of this terrifically located building, which is perfectly poised to capitalise on its location and offers competitive rentals to smaller businesses,” said Tower CEO, Marc Edwards.

The three retail properties purchased by Tower are nonmetropolitan shopping and community centres servicing the lower-LSM markets in high-growth nodes, close to commuter networks. The Shoprite Centre in Brits is situated at 50 Pienaar Street in the heart of the Brits CBD and is anchored by Shoprite. “The centre has a very good mix of national tenants, providing Tower with strong cash flows into the future,” said Edwards. The Shoprite Centre in Modimolle (formerly Nylstroom), situated in Nelson Mandela Drive, was built approximately five years ago and is anchored by Shoprite until November 2018. “Located on the main arterial route into Modimolle and approximately five kilometres away from the Modi Mall, this centre also enjoys a strong national tenant presence of over 75%.”

The Shoprite Centre in Ennerdale is situated in Marais Close in a middle- to lower-income area. “The centre is anchored by Shoprite until May 2021 and has approximately 2 000m2 of additional bulk available for future development,” said Edwards. “The centre is in good condition, but a minor face-lift and enthusiastic management will add enormous value. A new drive-through KFC was recently completed and plans have been drawn to develop a new wing, which Tower could consider at a later stage.”

Tower plans to roll out an occupancy-cost-reduction strategy to these new buildings, with a strong focus on ‘greening’ underpinning the fund. This pipeline of properties is coming from the private sector, where landlords are prepared to take a percentage of Tower shares as currency for the transaction.

As Tower is an REIT, holding the shares provides vendors with capital gains tax relief as well as diversification from single-property risks.”

A further R500-million worth of commercial acquisitions is in the due-diligence phase of acquisitions. Tower expects its total portfolio to increase to R3.5-billion by June this year.

 

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