Dipula looks to buy two retail centres within a diverse property portfolio for R1.27bn
On Friday, JSE-listed, diversified real estate investment trust (REIT) Dipula Income Fund (Dipula) announced its intention to acquire a diverse property portfolio for a purchase consideration of R1.27bn, taking Dipula’s total portfolio value to more than R8.5bn. The forward yield of the acquisition is 11.7%.
The portfolio being acquired comprises two retail properties in Gauteng, Chilli Lane and Chilli on Top, totaling 18,433m²; five office properties across Gauteng and the Western Cape totaling 23,138m²; and three redevelopment properties. As part of the same transaction, Dipula will also acquire, a 50.1% stake in a portfolio consisting predominantly of industrial properties for a total price of R209m.
Dipula has been very cautious with respect to new acquisitions for the past year, due to the weak economy, and political and market uncertainty.
CEO Izak Petersen said: "This acquisition is in line with our strategy of acquiring quality-enhancing properties that offer opportunities to extract additional value through redevelopments and refurbishments. The weighted-average, lease-expiry profile of the portfolio is defensive at more than four years, while tenant quality is superb, given that 97% of the gross lettable area is let to multinational, national and strong regional tenants."
The acquisition was expected to be yield-enhancing. The transaction complements Dipula’s existing portfolio of 174 properties valued at approximately R7bn with a total gross lettable area of 757,363m² including retail, office and industrial properties.
Dipula has concluded transactions for assets to the value of R277m during the year.