Dipula continues its yield-enhancing property portfolio growth

File Photo: Izak Petersen, CEO of Dipula Income Fund

Dipula signed agreements to acquire a portfolio of three government-tenanted office buildings for a total of R173 million and Tower Mall, a 15,348sqm retail mall under development in Jouberton in the North West Province, for R153 million.

JSE-listed property company Dipula Income Fund, on 7 September 2012, announced that it will acquire four properties for a combined R326 million, in its fourth major property acquisition since listing on the JSE in August 2011.

Izak Petersen, CEO of Dipula Income Fund says: “Both the office and retail acquisitions further Dipula’s strategy of improving the quality and average size of its portfolio on a yield-enhancing basis. The transactions expand our geographic and sectoral diversification. The office properties also confirm the benefits of Dipula’s black-owned external management company.”

Dipula Income Fund is a listed property loan stock company formed through the merger of Mergence Africa Property Fund and Dipula Property Fund, two majority black-owned property funds. Dipula has amongst the highest black shareholding in the SA listed property sector, of around 26%, and is managed externally by Dipula Asset Management Trust a 100% BEE company.

The three office properties all have relatively long government leases. They comprise the 3270sqm Byron Place in Pretoria acquired for R38 million, the 12,782sqm Sterkolite building in Rosslyn, Pretoria for R78 million, and 6909sqm Elco building in East London for R57 million. Dipula is acquiring them at a favourable yield.

Tower Mall will be a rural shopping centre anchored by Shoprite, with a high proportion of national tenants. Petersen explains the acquisition agreement ensures Tower Mall will make positive, sustainable contribution to Dipula’s rental income from the onset. It is expected to open in the final quarter of 2013. Any un-let space will be subject to a five year head lease from the seller secured by the retention of part of the purchase price.

Dipula is finalising the acquisition’s financial effects and, until announced, it advises Dipula linked unitholders to exercise caution when dealing in its linked units. Both office and retail transactions are subject to various conditions, including Competition Authorities approval.

Following this transaction, Dipula’s assets will grow to 189 sectoraly and geographically diverse properties valued at R3.4 billion.