Redefine to buy 28 Macsteel sites for R2.7bnComment on this story
REDEFINE Properties has boosted its exposure to industrial property and secured a better balance of its diversified commercial property holdings by agreeing to acquire a portfolio of 28 industrial properties from steel supplier Macsteel for R2.7 billion.
“This transaction will transform Redefine’s industrial portfolio, increasing it from… R5bn to R7.7bn, lifting the weighted average lease period from 2.5 years to 5.5 years and will bolster the defensive component of the portfolio,” Redefine executive chairman Marc Wainer said yesterday.
The property fund has also secured a lease with IBM South Africa for about 10 300m2 of space in its newly completed green office building at 90 Grayston Drive in Sandown in central Sandton.
Wainer said these two big transactions advanced the company’s growth strategy and furthered its objective of accommodating leading businesses in a diversified portfolio of larger property assets with low-risk, high-quality, inflation-beating income streams.
The Macsteel buildings are across eight provinces, with 75 percent of this space concentrated in Gauteng. The properties cover a total rentable area of about 560 000m2, including a small office component of about 12 percent of this area.
The transaction, still subject to approval by competition authorities but expected to be effective in November, represents an initial yield of 8.7 percent for Redefine that escalates at 8 percent a year, with a further five-year renewal option. From April 1 next year IBM SA will occupy about 55 percent of 90 Grayston, Redefine’s 16-storey premium-grade office property, on a 10-year lease.
A further 1 500m2 in the office building has also been let, resulting in confirmed occupation of 66 percent of the available lettable space. Wainer said that 90 Grayston was ideally suited to multinational businesses such as IBM and would provide it with “unique advantages”.
“This building is now de-risked and is one of Redefine’s largest office developments to date and is tailored to meet our portfolio strategy,” he said.
Redefine shares rose by 0.42 percent to close at R9.60 on the JSE yesterday.