| Tue 1 Apr 2008, 12:05 | | SAC - R170 Million Boost For SA Corporate`s Office Exposure |
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SAC
SAC
SAC - R170 Million Boost For SA Corporate`s Office Exposure
Press Release
SA Corporate Real Estate Fund
(formerly Martprop Property Fund)
(Incorporated in the Republic of South Africa)
Share Code: SAC & ISIN Code: ZAE000083614
A Collective Investment Scheme in property registered in terms of the Collective
Investment Schemes Control Act, No. 45 of 2002 and managed by SA Corporate Real
Estate Fund Managers Limited
(formerly Marriott Property Fund Managers Limited)
(Registration number 1994/009895/06)
("SA Corporate")
COMPANY PRESS RELEASE
R170 MILLION BOOST FOR SA CORPORATE`S OFFICE EXPOSURE
SA Corporate Real Estate Fund, the country`s third largest listed property fund,
is boosting its exposure to the office market through two transactions, worth
R170 million, in Durban and Bloemfontein.
SA Corporate has bought 1 Holwood Place, a landmark, three-storey property at La
Lucia Ridge, the premier office location in greater Durban, for R115 million.
Peter Sparks, executive director of SA Corporate, says there has been strong
tenant interest and a two-year tenancy for the 7 000m2 La Lucia Ridge property
has been secured with a major bank resulting in a yield in the first year of
11,1%.
The Umhlanga/La Lucia Ridge area has vacancies which have reduced from 6.2% in
2006 to 0.6% currently, with net rentals in excess of R100m2 being achieved.
Rental growth in premier office space has increased by 12.5% over the period.
The fund, managed by Old Mutual Investment Group Property Investments, has also
secured a R55 million two-storey office development now under construction on a
strategically located site in Bloemfontein. The 4500m2 property will be within
walking distance of the entrance to the University of Free State, Grey College
and Mimosa Mall.
He says the development in Bloemfontein is due for completion in October 2008
and will have a leading communications company as the major tenant on a 10-year
lease occupying 3500m2. It is in a node which has seen major corporate office
developments since 2004.
"This development comes at a time of a significant shortage of A-grade offices
in Bloemfontein. Government departments alone require 10 000m2 of new office
space. The lack of availability of zoned land further contributes to the high
demand."
Sparks says offices in prime areas in Bloemfontein are achieving net rentals of
R80/m2 (R90/m2 to R95/m2 gross) as opposed to R60/m2 net 18 months ago.
The projected initial yield for the development has increased from 9.5% to 11%.
This is as a result of favourable leasing above original expectations.
Ends
Contact
Craig Ewin - 083 441 0530
Peter Sparks - 082 462 5887
Date: 01/04/2008 12:05:17 Produced by the JSE SENS Department.
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