Vukile Property Fund, the retail specialist landlord has bought Pan Africa Shopping Centre and its expansion component for R669m as it expands its exposure to township, rural and commuter shopping centres. Pan Africa is located in Alexandra in Johannesburg. Vukile has also acquired the asset’s second phase extension due to be completed in 2024.
Vukile owns assets worth R33bn in South Africa and Spain. As much as 54% of its portfolio by value is in the Iberian country and it held through its 89.6% held Madrid-listed subsidiary Castellana Properties Socimi.
This Pan Africa Shopping Centre acquisition would complement Vukile’s “high-quality, low-risk retail property portfolio and positioning as a leading retail Reit in South Africa” according to CEO Laurence Rapp.
The acquisition will be funded out of proceeds from sales and existing resources and will not affect Vukile’s current loan-to-value (LTV) of 43%. LTV refers to a fund’s debt relative tp its asset base.
“Vukile has been focused on recommencing growth in our core markets from a strong operational and financial position. In early 2022, we successfully restarted our growth in Spain, and now we are particularly pleased to resume the growth of our South African portfolio with this major investment in Pan Africa Shopping Centre,” said Rapp.
“By acquiring this asset and its future extension, we are deepening our core investment strategy in South Africa and adding value for our stakeholders,” he said.
The 16 000 m2 retail centre is located in the heart of Alexandra’s iconic transport and retail hub, made history when it opened in 2009 to become South Africa’s first fully-integrated shopping mall and taxi facility.
Refurbished in 2021 and 2022, the centre is now well-established and very well supported by its consumer market, Rapp said.
It is anchored by Boxer with a high national retailer tenant component including Truworths, Pep, Mr Price, Ackermans, Jet, Clicks, Studio 88 and others. Pan Africa is set for a future 9 000m2 expansion.
The acquisition agreement splits the transaction into two indivisible parts – the existing shopping centre and its future expansion. Vukile will acquire the shopping centre for R414.6m from its sellers, the Pan Africa Development Company, which is held by Atterbury Property woth a 50.887%, Talis Holdings with 47.337% and Summit Ridge Trading 5 with the resr. Vukile will also appoint the sellers to develop the centre’s second phase expansion, which it will acquire for R254.3m on opening in April 2024.
Itumeleng Mothibeli, MD SA at Vukile said Pan Africa Shopping Centre is an excellent asset for the Vukile portfolio, as it focussed on a reliable tenant and customer base.
“As is typical of our assets, it has a high percentage of essential services tenants, which further fortifies the defensiveness of our portfolio,” he said.