March 15 2024
Burstone Group has announced its joint acquisition of The Neighbourhood Square, a convenience shopping centre located in Linksfield, Johannesburg, from Investec Property for R380m.
Burstone Group was formerly called Investec Property Fund. It is a company listed by Investec Group. Investec Property is a development company formed by Investec Group more than 40 years ago.
Burstone’s partner in the transaction is property development and investment company Flanagan & Gerard (F&G). Burstone and F&G will acquire a 50% stake in the centre, paying R190m each.
The purchase takes place after Investec Property granted Burstone a right of first offer over certain properties following the management internalisation process that saw the transition of Investec Property Fund into the Burstone Group in 2023.
“The acquisition reflects Burstone’s strategic commitment to transforming value for all stakeholders through partnerships and unlocking potential by investing in best-in-class assets,” according to Burstone.
The open-air lifestyle and convenience retail centre is just over 10,000m2 in size.
“The Neighbourhood Square is a strategically important asset, and the acquisition reflects our priorities of focusing on property fundamentals and collaborating with best-in-class partners, in this case, Flanagan & Gerard. The deal is a great example of our strategy to deliver income and capital growth over the long-term,” Andrew Wooler, CEO of Burstone Group, said.
The Neighbourhood Square is a newly built, high-quality, open-air, convenience retail centre. It has zero vacancies, average trade density of circa R7,000/m², a WALE of 4.3 years, and circa 86% national retail tenants anchored by Checkers and Woolworths.
The Neighbourhood Square Phase 1 was completed in 2020, and Phase 2 which incorporated Woolworths, was completed in November 2023.
Wooler said the mall enhances Burstone’s portfolio of quality assets where management can leverage its expertise to unlock value over time. The Neighbourhood Square is expected to deliver long-term, sustainable rental growth above market trends. With a predictable long-term income stream, the acquisition supports Burstone’s strategic objective of delivering sustainable returns across its portfolio, he said.
“The transaction adds to the quality of Burstone’s retail earnings, reinforcing its single-minded focus on acquiring assets with compelling property fundamentals in strategically selected sectors where it has an in-depth understanding of market dynamics,” said Wooler.
Burstone is an international real estate business with around R37bn gross asset value (GAV) under management and around R5.4bn third-party capital under management. The group invests in varied real estate asset types, focusing on fund management, asset management and development
management.
Burstone owns Design Quarter; Balfour Mall; The Firs; Dihlabeng Mall; Fleurdal Mall; Newcastle Mall; Zevenwacht Mall; Kriel Mall and The Neighbourhood Square.
As Investec Property Fund, Burstone listed on the JSE in 2011 and currently operates in SA, western Europe and Australia. About 55% of the group’s asset base is comprised of foreign investments. The group has a strong management track record of more than 30 years, operating in both local and
international markets.
247@propertyflash.co.za
