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Paraprop - Acquisitions increase Paraprop"s portfolio by 66% to R1,960-million
PARAMOUNT PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1945/019928/06)
Share code: PRA
ISIN: ZAE000028577
("Paraprop")
ACQUISITIONS INCREASE PARAPROP"S PORTFOLIO BY 66% TO R1,960-MILLION
Thursday, 20 October 2005
Listed property loan stock company, Paramount Property Fund (Paraprop), today
announced the acquisition of 11 new properties with a total value of R839-
million. This takes the size of Paraprop"s property portfolio to just under R2-
billion and its market cap to over R1-billion.
Paraprop MD, Rodney Squire-Howe, said, "It has been our medium-term objective to
grow Paraprop from being one of the smaller funds on the listed property sector
to being a `mid-cap" fund. These acquisitions are an excellent investment and a
good mix of office, retail and industrial properties. The investments range from
high-profile, blue chip properties to those where we believe we can add some
value, to solid long-term lease cash-flow streams."
Squire-Howe added that it was not an easy task to acquire assets in the current
active property market and that the team have been working on these for a long
time.
"Coincidentally, the deals have all come together over the past few weeks,
enabling us to make one big announcement," he added.
The properties include:
The flagship 24 000m2 office property named The Terraces on Cape Town"s popular
Bree Street, acquired for R244-million as well as the adjacent office complex,
33 On Bree.
Lighthouse Mall Shopping Centre in Umhlanga, Kwa-Zulu Natal - a 7 873m2 retail
centre with Checkers, Woolworths, Clicks and CNA as major tenants was acquired
for R87,5-million. The property is based in a prime location in town.
Middestad Mall in Bellville - a 21 000m2 retail property, occupied by Shoprite,
Markhams, Musica, Diskom and Pep Stores as major tenants. The Mall caters
predominantly to the C and D income groups and is strategically located adjacent
to Bellville station.
Paraprop currently owns the retail portion of the Golden Acre on a sectional
title basis, but in terms of the new arrangement, it has now acquired 75% of the
Golden Acre office tower, 75% of the adjoining Shoprite building and sold 25% of
the retail section, with the result that Paraprop will now own a 75% interest in
the combined properties. This new arrangement of the ownership interests will
facilitate significant new development opportunities.
The well-known Avalon office complex just off Mill Street in Gardens, Cape Town.
This complex has been refurbished and will involve the demolition of certain
components of the building in order to improve parking. The property was
acquired for R26,2-million.
Midas Building in Meadowdale, Johannesburg. An 18 980m2 complex of industrial
and office buildings on a 42 207m2 site with blue-chip group Midas as tenant on
an 8 year triple-net lease. The property is well-located off the N3 freeway in
a popular industrial area close to the airport, and was acquired for R110-
million.
The MTN building in Mount Edgecombe, KZN which is an attractive modern office
complex of 7 000m2 with MTN as tenant until 2011 was acquired for R72-million.
Northcliff Shopping Centre is a 5 283m2 shopping centre in a good location in
Johannesburg, with Pick `n Pay, First National Bank, Steers and Spec Savers as
major tenants was acquired for R37,9-million.
DCD Dorbyl portfolio consists of three industrial properties with a total value
of R60,7-million, with industrial group DCD Dorbyl as tenant on triple-net
leases until 2017.
Says Squire-Howe, "We have sought to maintain Paraprop"s exposure to the Cape
property market and wanted to increase our exposure to the retail property
market. "This tranche of properties achieves exactly that. The geographical
breakdown is identical to that of the total fund with 54% of the total new space
located in the Western Cape, 26% in Gauteng and 20% in KZN. In terms of
sectoral breakdown 32% of the new space is retail, 38% office and 21%
industrial."
With the new acquisitions, Paraprop"s total portfolio now comprises 42% office,
30% retail and 21% industrial.
The purchase price was paid in a combination of linked units 50% and debt 50%.
"We were able to place all the linked units in a short space of time due to a
high level of demand with many vendors keen to accept units as payment, rather
than cash."
"The acquisitions push Paraprop into a new league with a well balanced
portfolio, secure earnings" flows with upside potential. We will continue to
work the portfolio hard and add value to our properties," Squire-Howe concluded.
For further information, contact:
Rodney Squire-Howe, Managing Director, Paramount Property Fund
(021) 659-5945; 083-251-9537
Fred Jenkings, Financial Director, Paramount Property Fund
(021) 659-5966; 082-495-6902
Issued by: Nicola Nel, Atmosphere Communications
(021) 461-2117; 082-459-2288
Date: 20/10/2005 03:31:13 PM Produced by the JSE SENS Department
