"The acquisition will contribute to the company's distributions growth," says Jeffrey Wapnick, MD of Octodec Investments. "It is also in line with its strategy of actively pursuing redevelopment and investment opportunities that will enhance the overall quality and value of our portfolio. The acquisition represents an attractive investment in a prime location situated in an established busy industrial area."
The 35,990sqm industrial property caters for a variety of enterprises through 124 light industrial factories and represents a 10.4% annualised property yield for Octodec. The purchase price will be settled in cash and the property will be acquired through the company's wholly-owned subsidiary Presmooi.
The company has continued to unlock the value of its Johannesburg and Pretoria CBD portfolios through redevelopment and refurbishment.
In the recent interim financial results report, the company invested some R42 million in the upgrade of properties, during the six month to 28 February 2011, including Killarney Mall and industrial unit complex Reliance.
"The company's total investment in the Killarney upgrade amounts to R33.8 million and ensures the longevity of this key asset," explains Wapnick. An upgrade of the Killarney Mall office block was also completed at a cost of R4.8 million. Vacancies have reduced significantly to around 3% for the entire Killarney Mall, which will support the sustainability of increased distribution growth.
The redevelopment of Rand Central in the Johannesburg CBD commenced during the period. This R45 million investment will create 143 residential units. It is anticipated that the project will be completed by March 2012 and yield a return of 9.9% once fully let.
The company also recently purchased four properties in the Johannesburg CBD for R90.2 million at an average initial yield of 10%.
