Johannesburg - Listed retail property fund Resilient has embarked on or is about to commence with extensions to its retail assets in South Africa worth a total of more than R1.98 billion.
The largest of these extensions is to the Irene Village Mall.
Des de Beer, the managing director of Resilient, said transfer was expected this month of the last portion of land that would facilitate the extension of the existing 29 644 square-metre Irene Village Mall to an 80 000 square-metre regional mall.
De Beer said the board had agreed to the commencement of earthworks at a cost of R45 million to take advantage of major roadworks in the immediate vicinity that required landfill.
The board previously approved the development at a yield of 7 percent at an anticipated cost of R1.3bn.
The 2 855m² extension to the Diamond Pavilion at a cost of R127.6m and the 2 753m² extension to the Boardwalk Inkwazi at a cost of R76m are both scheduled to be completed in November.
Construction of the 17 396m² expansion to Ilanga Mall commenced in October, with the final phase scheduled for completion in September next year.
Resilient has 90 percent ownership of the Ilanga Mall and its share of the cost of the expansion is R478m.
De Beer said the conditions precedent for the transfer of the 50 percent interest in Mams Mall at a cost of R120m had been met and transfer was expected in October this year.
Construction was scheduled to commence in November to extensively redevelop the existing 17 333m² shopping centre to increase its gross lettable area to 70 000m².
Resilient expects the extensions, reconfigurations and substantial improvements to the tenant mix at The Galleria to be completed ahead of the holiday season in November.
Resilient owns 60.94 percent of Resilient Africa, a joint venture with Shoprite Checkers for the development of malls in Nigeria for the supermarket chain.
De Beer said business risks in Nigeria had increased and the Nigerian government continued to move away from the previous policy of “managing” the currency but restrictions on clothing imports remained in force with severe consequences for clothing retailers.
He said Nigeria was an underdeveloped market with attractive medium- and long-term development and investment opportunities.
“Resilient Africa continues to pursue investments providing strict criteria are met. The Resilient Africa board has conditionally approved small retail developments in Port Harcourt and Uyo anchored by Shoprite supermarkets. Two further developments are currently being evaluated,” he said.
De Beer said Resilient’s investment in Nigeria was relatively small and the group had at end-June this year advanced R850m to Resilient Africa, with additional commitments totalling R265m. However, De Beer said a strong platform had been established that could be expanded once economic conditions improved.
Resilient last week reported a 25.1 percent growth in distributions a share to 488.73c for the year to June from 390.67c in the previous year.
The property fund said 9 percent of this growth was attributable to the impact of capital raisings that had reduced the cost of funding and a further 7 percent to dividends from Fortress B-shares that were ahead of budget and from New Europe Properties Investments and Rockcastle that benefited from rand depreciation.
The group is forecasting distribution growth of between 14 percent and 16 percent for its 2017 financial year.
Shares in Resilient dropped 1.31 percent on Friday to close at R133.72.
BUSINESS REPORT