Delta offloads noncore Braamfontein asset for R25m to cut debt

Delta Property Fund will sell its property at 101 De Korte Street, Braamfontein, for R25m cash as it disposes of noncore assets and reduces debt.

The sale includes both immovable and movable assets associated with the property. The buyer, Vivid Yellow Investments — owned by Alon Kirkel, who is a former chief investment officer at Fairvest — is not a related party in terms of JSE listings requirements. 

The transaction is expected to become effective by October 31, pending regulatory approvals and transfer of ownership. Delta said the proceeds from the sale will be applied towards lowering its debt burden, in line with its ongoing portfolio optimisation strategy.

“Delta will receive R25m in cash for the sale of its Braamfontein property, including a R2.5m nonrefundable deposit already paid and R22.5m secured by guarantees due on transfer. The deal is subject to JSE compliance and any required regulatory approvals within 120 days,” Delta said in an announcement on the Stock Exchange News Service.

The De Korte Street property was independently valued by Knight Frank, a London-based global consultancy property firm on February 28. Financial information, such as rental income and vacancy, were sourced from Delta’s audited annual results. The figures were not reviewed by the company’s auditors.

In addition to 101 De Korte Street, the group has completed the sale of Unisa House in Marshalltown to Guder Properties, with net proceeds used to settle the outstanding debt on the property, the company confirmed.

Last month, Delta reported a mixed financial performance for the year to end-February, with net operating income rising 10.3% to R721.4m supported by steady rental income, cost control, and the disposal of noncore assets. Still, the company recorded a net loss of R104.2m, weighed down by higher credit losses and a bigger tax bill.

The group also highlighted successful debt restructuring, renewing facilities with Nedbank, Standard Bank, Investec and other lenders as it works to optimise its portfolio amid tough market conditions.

majavun@businesslive.co.za