Tower Property Fund has increased its exposure to central and eastern Europe. File Photo: IOL
PRETORIA – Listed Tower Property Fund has increased its exposure to central and eastern Europe with the acquisition of a prime industrial property in Zagreb, Croatia, for about R149 million.

Tower said yesterday that the 5755m2 property located in itnjak, the largest industrial node in Zagreb, was acquired from VMD Grupa.

VMD Grupa is Tower’s partner in its Croatian office property VMD Kvart building B, which was Tower’s first Croatian acquisition.

The itnjak property was acquired by Tower Industrial, a wholly-owned Croatian subsidiary of TPF International, the newly incorporated Mauritian 74 percent-owned subsidiary it established to ring-fence its Croatian assets.

Tower said it was let to a leading manufacturer of wiring harnesses in the automotive industry, with part of its engineering division based in Zagreb, with the lease agreement expiring in August 2027.

It said the lessee occupied a gross lettable area of 5755m2, with an additional 1020m2 of vacant gross lettable area set aside for its expansion.

Tower added that TPF intended growing its exposure to the region through its strong local relationships, including those opportunities provided by VMD, a well-respected developer in Croatia with whom Tower has a long-standing relationship.

It said TPF would particularly target industrial and convenience retail properties.

Marc Edwards, the chief executive of Tower, confirmed in July this year that they were considering the possible separate listing of TPF International, because investing in an unlisted entity was problematic for institutional investors.

He said it was too early to comment on where such a listing would take place, but with TPF International based in Mauritius, it would make sense that it was listed there and also in South Africa to take advantage of some of the South African interest in Eastern European property.

Tower owned five Croatian properties at its end-May financial year-end, which accounted for 28 percent of the fund's total property assets, which were valued at R4.9 billion.

Shares in Tower Peoperties closed 0.78 percent lower yesterday on the JSE at R6.40.