Delta Property Fund: New acquisitions diversify portfolio

DELTA, the listed property fund, has acquired a portfolio of 14 properties in Bloemfontein and a 15th in Nelspruit with a total gross lettable area of 81 516 square metres from Orthotouch for a total of R507 million. The effective date of the transaction is expected to be August 1 with the purchase consideration settled through a combination of debt funding and the issue of additional Delta shares. Explaining the rationale for the transaction, Delta said yesterday that the acquisition was in line with the fund’s strategy of actively pursuing yield accretive investment opportunities and leveraging its expertise as a sovereign underpinned real estate investment trust (Reit). Delta added that it had an existing portfolio of three smaller assets located in the Bloemfontein central business node and this acquisition provided an opportunity to further diversify its geographic spread. It also offered redevelopment and letting opportunities that might lead to further value extraction for Delta shareholders. The fund said the acquisition also supported Delta’s strategy of bulking up in regions where it had existing asset management and property management representation. The transaction is still subject to several conditions precedent, including the approval of the JSE and competition authorities. Delta shares declined by 1.12 percent to close lower at R8.80 in Johannesburg yesterday. – Roy Cokayne