Sycom pays R183m for balance of Paarl Mall
Sycom reaches agreement with Grapnel to acquire a further 15% shareholding in properties where upmarket shopping centre is located
Listed property unit trust Sycom Property Fund has entered into agreements to increase, through acquisitions worth R183m, its shareholding in Paarl Mall shopping centre to 100% from 70%.
Sycom says it has reached an agreement with Grapnel Property Investments to acquire a further 15% shareholding in the properties on which the shopping centre is located.
The company had also entered into an agreement with Changing Tides 91 to acquire a further 15% of Paarl Mall, Sycom said.
Together, the transactions will increase Sycom’s interest in Paarl Mall from its existing 70% to 100%. The R183m purchase consideration for the two transactions would be payable in cash, with R91,5m payable to Grapnel and R91,5m payable to Changing Tides 91. The yield was 8%.
Sycom said it had also agreed with Grapnel to acquire the Kraft Foods building in the Harrowdene Office Park in Woodmead for R88m, payable in cash. The building covers 4,840m² and was bought at a yield of 8%.
The value of 15% of the Paarl Mall property was arrived at by the independent external property valuer, HHMP Property Developers. The forecast revenues for the property for the one month ending March 31 and for the 12 months to March 31 2013 were R4,5m and R56,37m respectively. Net rental income after interest and tax was expected to be R59000 for the one month and R1,33m for the 12-month period to March 31 2013.
In the year to March 31 2011, Sycom reported total revenue of R493,4m against R446,7m the year before. Profit for the group climbed to R629,6m from R479,5m.
Other retail malls in Sycom’s portfolio include Vaal Mall, Fourways Crossing and Somerset Mall.
At the last year-end, management hinted at further acquisitions when it said it might consider pushing up the overall level of gearing to about 30% from about 20% if suitable companies could be found to buy.