JOHANNESBURG - Dupula, the listed diversified real estate investment trust (Reit), has agreed to acquire a portfolio of 33 properties with a total gross lettable area of about 335 000m² for a total of R1.27 billion.
The transaction, together with transactions concluded during the year to the value of R277 million, will boost the total value of Dipula’s property portfolio to R8.5bn from about R7bn.
The portfolio has been acquired at a forward yield of 11.7percent.
Izak Peterson, the chief executive of Dipula, said on Friday that the acquisition was in line with Dipula’s strategy of acquiring quality enhancing properties that offered opportunities to extract additional value through redevelopments and refurbishments.
Petersen said the weighted average lease expiry profile of the portfolio was defensive at more than four years, while tenant quality was superb given that 97percent of the gross lettable area was let to multinational, national and strong regional tenants.
He added that the acquisition was expected to be yield-enhancing and the portfolio being acquired had minimal vacancies at 0.8 percent.
Complemented
Petersen said the transaction complemented Dipula’s existing portfolio of 174 properties with a total gross lettable area of 757363m², including retail, office and industrial properties. The transaction comprises two acquisitions.
In terms of the first acquisition, Dipula has entered into agreements to acquire a portfolio comprising two retail, five office and three development properties with a total gross lettable area of 51087m² with an additional 33093m² of developable bulk for a total of R1.06bn from Setso Holdco wholly-owned subsidiary Luxanio Trading 181 (Propco).
The two retail properties being acquired total 18433m² and are Chilli Lane and Chilli on Top in Sunninghill in Johannesburg, while the five office properties totalling 23138m² are spread across Gauteng and the Western Cape.
Transaction
As part of the same transaction, Dipula will also acquire a 50.1percent stake in a portfolio consisting of one office and 22 industrial properties with a total gross lettable area of 143175m² for a total price of R209m. Petersen said the transaction was a further step in Dipula’s consistent portfolio growth path, with growth of more than 300percent since listing through portfolio-enhancing acquisitions such as this transaction.
“Once fully implemented we are confident that the liquidity of our shares will improve.
“The acquisition maintains our emphasis on owning a diversified portfolio and in particular aligns with our commitment to seeking growth through extracting additional value from our portfolio to continue delivering distribution growth,” he said. The expanded portfolio would add further diversity to Dipula’s assets, thereby boosting resilience in a tough economic environment.
The acquisition still subject to certain conditions precedent. Shares in Dipula rose 3.09percent on Friday on the JSE to close at R10.