Nedbank finances Shopping Centres for BEE Consortium Listed Property Fund

New retail experiences are on the cards for rural consumers in Polokwane and Kwazulu Natal as Nedbank Corporate Property Finance has partnered with Dipula Income Fund Limited to acquire three plazas in the respective provinces

Dipula Income Fund Limited is a property loan stock company that has been listed on the JSE since August 2011. Focusing on long term property investment in South Africa, Dipula owns a sectorally and geographically diversified portfolio of 175 properties comprising 50% retail, 23% offices and 27% industrial properties by gross lettable area (GLA). Approximately 75% of the portfolio by GLA is situated in Gauteng with properties in all other provinces. Dipula’s market capitalisation is approximately R1.7 billion.

“The funded shopping centres are dominant in the catchment area and are on major roads which make them well located,” says Ken Reynolds, regional executive: Nedbank Corporate Property Finance, Gauteng. “They are situated in remote rural areas and were established to satisfy the retail needs of the local population, saving local consumers from travelling long distances to find a formal retail offering.”
 
Nedbank Corporate Property Finance has stayed close to Dipula since its listing and this has led to their request for funding of new acquisitions with the aim of diversifying their funding sources. Nedbank approved finance to the value of R125 million to fund 58% of the purchase price of the Bochum and Blouberg Plazas in Polokwane and Nquthu Plaza in Kwazulu-Natal bringing the total purchasing price is R247.8 million.

This was Dipula’s first acquisition after listing and these retail properties are in line with the company’s strategy to improve the quality and geographic spread of its portfolio by investing in the emerging retail market. They also meet Dipula’s objective of increasing the value of its individual properties to between R20 million and R200 million.

Izak Petersen, CEO of Dipula Income Fund, says he is pleased with Dipula’s first year’s performance as a listed company. “Our strategy is to continue to grow the portfolio prudently to more than R10 billion in the next four to six years, with specific focus on sustainable income growth.  We also aim to invest responsibly by acquiring centres in under serviced areas”

As a JSE listed property company with high black ownership and black management control, Dipula hopes to unlock value through partnerships like this with Nedbank Corporate Property Finance. Dipula Limited is one of a few listed BEE property funds and has a long standing relationship with Redefine – a well respected Nedbank client.

“Nedbank Corporate Property Finance’s core business is to fund commercial properties and Dipula fits this focus with a substantial portfolio,” says Reynolds. “Nedbank is pleased to fund Dipula which is also a black empowerment fund – one of the bank’s focus areas.”

Nedbank Corporate Property Finance is a leading provider of funding to the listed-property sector, covering the majority of the companies listed on the JSE. “Dipula is one of the newer players in the listed space with plans to grow their portfolio,” says Reynolds, “and we at Nedbank Corporate Property finance would like to participate in their growth going forward. This partnership reiterates Nedbank’s commitment to the industry and its investment in platforms that uplift and empower stakeholders.”