File photo: BLOOMBERG/BRYAN VAN DER BEEK
File photo: BLOOMBERG/BRYAN VAN DER BEEK

Tower Property Fund, which owns properties in SA and Croatia, said it has sold a retail property in Croatia for €12.4m (R228m), which will be used to reduce its debt.

The sale of the Vukovarska retail property was made at an 11% premium to its book value, “reflecting the strength and desirability of Tower’s Croatian assets, even amidst the current market uncertainty”, the group said.

The Croatian assets are held by its subsidiary TPF International, of which Tower owns 74%. The group will receive €6.5m (R120m) in net proceeds, which will be used to reduce its euro-denominated debt, which stood at about R1.2bn as of the end of November.

“Given the low cost of the euro debt, this will dilute distributable income, but will strengthen Tower’s balance sheet and substantially reduce Tower’s currency-related risks, which the board considers a more pressing concern in the current environment,” the group said.

Tower owned 43 properties valued at R5bn, with six assets in Croatia accounting for 32% as of its half-year to end November.

In morning trade on Wednesday Tower’s share price had fallen 0.36% to R2.80, having halved over the past 12 months.

gernetzkyk@businesslive.co.za