The 36,300m² property becomes the fund's second biggest asset, and grows the fund's presence in Port Elizabeth further.
"This yield enhancing acquisition is significant for Arrowhead and enhances the quality of our portfolio.
"Cleary Park is located right in the heart of Port Elizabeth's northern areas and serves the retail needs specific to the local community," said Arrowhead chief financial officer Imraan Suleman on Friday, 2 October.
Cleary Park is expected to show a net profit of R41.4m in the year ending January 2017.
"This acquisition has come by at a very good time for us. Our fund is performing very well, as is our portfolio. Cleary Park is located next to a taxi rank and is fed by a large catchment area.
"We are very happy with this acquisition," Suleman said.
Since listing in late 2011, Arrowhead has been a strong performer that has regularly exceeded market expectations.
Its strategy is to grow aggressively through acquisitions.
In the six months ended March the company made seven acquisition, mainly of residential properties.
Arrowhead was created by property doyen Gerald Leissner, who has worked in the property industry since he was in his 20s. He is now 73 and, as CEO, is managing to find good deals that are bringing double-digit returns to Arrowhead's shareholders.
Having listed Arrowhead with a portfolio of assets worth about R1.72bn, the company's nine-member team (including senior managers) plans to reach a portfolio worth R10bn by next year.
"Our strategy is to grow opportunistically and aggressively. This is while our properties are well run," Suleman said.
The head of listed property funds at Stanlib, Keillen Ndlovu, said Arrowhead had surprised him on the upside since it listed and that the fund had timed its strategy well.
He said that the distribution growth had been especially impressive because it was achieved while expenses were kept at notable lows. "Arrowhead's share price is likely to climb throughout the rest of this year, on the back of financial results for the year to September," Ndlovu said.
Suleman said Arrowhead was confident it would continue to deliver strong distribution growth going forward, but was unable to speak in detail as the company was in a closed period and due to publish results for the year to September.
Source: Business Day
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