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Vukile plans to grow portfolio to R15bn

East Rand Mall

East Rand Mall

27th May 2013

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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As property group Vukile Property Fund on Monday reported a portfolio valued at nearly R10-billion, it set its sights on increasing this to R15-billion over the next year or two.

The “property hungry” group’s portfolio had increased by 26% to 78 properties with a total market value of R7.7-billion and a gross lettable area (GLA) of 1 028 960 m2 following the acquisition of several new properties, including the R1.5-billion portfolio from Sanlam, during the 12 months ended March 31.

In the three months post year-end, the group further extended the value of its portfolio to R9.6-billion, adding the East Rand Mall, on the East Rand, the proposed Linbro Park industrial development, in Gauteng, and the Edendale Mall, in Pietermaritzburg, to its portfolio.

Vukile bought a 50% stake in both the East Rand Mall and the Edendale retail centre for R1.1-billion and R204-million respectively, and planned to inject R119-million into the development of a 22-unit, 15 000 m2 warehousing facility at Linbro Park by April 2014.

The finalisation of a number of property deals, including that of Encha Properties' four properties and that of the Hammarsdale Shopping Centre, would push the portfolio over the R10-billion mark, after which the company would pursue a portfolio valued at R15-billion through acquisitions, developments and redevelopments.

Vukile had concluded an agreement with black-empowered firm Encha Properties, as part of Vukile’s transformation strategy, to buy four government-tenanted properties from Encha for R1.04-billion.

The deal included a put and call option over the Pretoria Momentum Building, which would increase the value of Vukile’s portfolio by about R1.4-billion.

The property group was also finalising the acquisition of the 19 200 m2 Hammarsdale Shopping Centre, which was expected to open in June.

Further, Vukile entered into a joint venture agreement with the McCormick Group for the acquisition of a 50% stake in five retail developments spanning 69 000 m2.

The first three of these developments were under construction with completion dates scheduled for the end of July and the end of October.

Meanwhile, in the year to March, Vukile had disposed of 11 noncore properties, with a GLA of 80 445 m2, for a combined value of R372-million.

A further two properties – the Durban Embassy and the Randburg Triangle – with a GLA of 35 412 m2, were sold for R251.5-million post the financial year-end.

Vukile had also put the 8 086 m2 Midtown building and the 8 423 m2 Lichtenburg Shopping Centre up for sale at a yet-to-be-disclosed amount, and was currently selling its Midrand industrial land for R21.8-million.

Meanwhile, the property group had authorised and contracted R486.2-million worth of refurbishment and expansion projects, including the upgrade and maintenance of Randburg Square, the third and final phase of the upgrade to the exterior of the Hillfox Power Centre, in Roodepoort, and the upgrade and addition of more parking decks for the Bellville Tijger Park offices, in Cape Town, besides others.

The firm had further authorised, but not yet contracted, R133-million of work to upgrade shopping centres, replace air-conditioning units, refurbish lifts, tenant installations and other minor capital expenditure projects.

Vukile declared a distribution of 131.59c per linked unit for the year ended March – a 5.43% increase compared with the 124.81c per linked unit reported in the prior year.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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