Arrowhead acquires Sasol building in Rosebank for R250m

Arrowhead Properties (AWA) said on Friday it had an agreement with Sasol Pension Fund to acquire the Sasol building in Rosebank‚ Johannesburg‚ for R250 million.

Arrowhead Properties (AWA) said on Friday it had an agreement with Sasol Pension Fund to acquire the Sasol building in Rosebank‚ Johannesburg‚ for R250 million.

The company said the acquisition‚ at a forward yield of approximately 15%‚ was in line with its strategy to make distribution enhancing acquisitions.

The acquisition is valued at R250 million, of which R125m would be paid in cash and the balance in an allotment and issue of 9.3-million Arrowhead A and B linked units, respectively.

“This building is an extremely attractive addition to our portfolio,” explains Imraan Suleman, CFO of Arrowhead Properties. “It will enhance the overall quality of our portfolio and, at a forward yield of 15%, brings strong income returns and long term capital growth.”
 
Unless the lease is extended, Sasol will be vacating the premises at the end of the lease term in December 2016. Arrowhead is confident that the building is highly lettable, and have compensated for any negative reversions with a high initial yield.
 
“Notwithstanding the size and quality of the building, we believe that the Rosebank office node is reviving. There are a number of exciting new retail and office developments in the area which are well supported by the growing surrounding residential nodes and the Gautrain station. It is fast becoming the city’s third high-rise business centre after Sandton and the inner city,” concluded Suleman.
 
Sasol is consolidating its offices in Sandton.

The transaction is subject to approval by the Competition Commission and Arrowhead expects the effective date to be February 1 next year.