The properties will be acquired from Tresso Trading and includes over 225 000 m2 of sectorally- and geographically-diverse landmark properties.
This is Growthpoint’s second substantial acquisition from Tresso Trading and follows its purchase of 48 properties in June last year for R1,08-million.
The retail properties acquired in the latest deal include the Lakeside Mall in Benoni, on the East Rand, as well as Hatfield Plaza, in Pretoria.
Of the 13 commercial properties acquired, 12 are A-grade and seven of the eight industrial properties are A-grade.
Growthpoint, in association with the property-projects division of Investec Property Group, undertakes property developments, and commercial and industrial fund manager Rudolf Pien-aar tells Engineering News that the com- pany won a South African Property Owners Association award for inno- vative excellence in the property development in the industrial development category. The award was won in a joint venture with Investec Property Group on a R20-million turnkey development for pharmaceutical company Fresenius Kabi South Africa. He says that the award recognised the project’s contribution to the high standard of property development in Southern Africa. An unusual aspect of the development was the successful integration of three separate uses – a custom-built head office for Fresenius Kabi SA, a high-tech laboratory and a warehouse for pharmaceutical products. The 3 150-m2 office facility and the 3 750-m2 warehouse are located in the Growth- point Business Park in Midrand, Gauteng, which consists of 23 buildings with a gross lettable area of around 62 000 m2 and was custom- designed to meet the requirements of the pharmaceutical giant.
Pienaar says that Growthpoint is also involved in some other property development work, which includes a 4 000-m2 office building in the 52 000-m2 Constantia Office Park in Roodepoort, Gauteng.
This R26-million project in the company’s Constantia Office Park, which mainly hosts blue-chip tenants, started in October last year, and will be completed by September. He reports that the South African market is ready for redevelopment work to extend the end-of-life expectancy of buildings and that Growthpoint is geared for this.
“The trend to refurbish is purely driven by economics,” Pienaar says. He explains that the purchase price for an older property will cost around R3 000/m2 with refurbishment cost taking costs up to R6 000/m2. This is compared to building costs which will take a new development’s cost up to between R8 000/m2 and R9 000/m2.
“Sometimes, older buildings are also on better- located land,” notes Pienaar.
Growthpoint is currently the largest listed South African property company by assets and has a well-spread geographic portfolio, comprising Johannesburg (45%), Pretoria (21%), Western Cape (15%), Kwazulu-Natal (9%), the Eastern Cape (5%) and other areas (5%).
The company’s main properties are spread over the retail (48%) and commercial (46%) pro- perty sectors, while it also has some industrial (6%) properties. Commenting on trends in the property development market, Pienaar says that the commercial market, especially in Cape Town, has grown tremendously.
“This is for both new developments and redevelopments,” he says, adding that it is a question of supply and demand and the perception of a scarcity of virgin land that drive property development in Cape Town.
Investec Property group manages Growthpoint, which, Pienaar says, gives the company a competitive edge, as it shares a big corporate company’s vision and enables the two companies to form valuable synergies.