Futuregrowth grows its robustly performing development property portfolio
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Futuregrowth’s Community Property Fund has added to its portfolio with the acquisition of King Senzangakhona Shopping Centre and Murchison Mall, both in KwaZulu-Natal, the asset management firm said yesterday.
The fund invests in retail shopping centres in rural and township areas and has consistently beaten its performance benchmark since its inception more than 20 years ago.
The acquisitions bring Comprop’s portfolio to 22 shopping centres, with a total gross lettable area of more than 369 000 square metres, valued at more than R5.4 billion.
King Senzangakhona Shopping Centre is a regional shopping centre in Ulundi, which is anchored by Superspar, Game and Cashbuild.
Murchison Mall is an enclosed shopping centre in Ladysmith, about 238km inland from Durban, which is anchored by Shoprite and is situated in the Ladysmith CBD opposite the main taxi rank.
Community Property Fund portfolio manager Smital Rambhai said they looked forward to creating further positive community impact through the acquisitions, while delivering strong stable long-term returns with a low degree of volatility for the fund’s investors.
Comprop is a fund among Futuregrowth Asset Management’s developmental investments. Its shopping centres are located in prime locations within townships and rural areas around the country.
The Futuregrowth Community Property Composite’s benchmark target is to outperform consumer price inflation by 4 percent a year before taxes and fees and with income reinvested over a rolling three-year period, which it outperformed over 20 years, 15 years, 10 years, seven years, five years, three years, one year and over three months, according to the website.
The Composite has purchased and developed 34 shopping centres over the past 20 years. The centres deliver retail services to low- to middle-income groups, and vary in size between 1 700- 40 000 square metres, and are typically tenanted by supermarkets, clothing, banking and furniture retailers.
Large, listed, national and franchise tenants occupy, on average, more than 80 percent of the space across all shopping centres.
The Fund’s income yield improved during the quarter due to improved collection rates and full rentals being received from tenants. The key aim during the course of 2021 would be to keep vacancies to 5 percent or below, so as to continue driving income in the portfolio in a tough economic environment.
The fund generated a return of 2.75 percent for the quarter to March 31, 2021, and a total return of 7.83 percent for the 12-month period to that date.