By Suren Naidoo
Leading black empowered JSE-listed mid-cap REIT, Dipula Income Fund, is set to see its diversified property portfolio top the million square metre mark. The milestone will come in May when Dipula takes transfer of a 340,221m² (GLA) property portfolio as part of a R1.25 billion acquisition.
Dipula took the next step in finalising the deal this week, when it embarked on a highly successful bookbuild on the JSE, raising some R790 million. The capital raise, aimed at financing most of the deal, received a positive market response with it being 32% oversubscribed.
R790 million raised in oversubscribed bookbuild
Commenting on the bookbuild, Dipula CEO, Izak Petersen, said: “We were very pleased with the capital raise as we had aimed to raise R600 million and were approximately 32% oversubscribed… The capital will enable us to continue realising our strategy of growing our fund through strategic acquisitions.”
Dipula said the R1.25 billion property portfolio comprises retail, office and industrial properties in Gauteng, the Western Cape, KwaZulu-Natal, Eastern Cape, Mpumalanga and North West. The deal was first announced in November 2017, but was finalised last month after pre-emptive rights regarding certain properties in the acquisition were either waived or exercised.
According to Dipula, the portfolio being acquired has a forward yield of 11.8% and will also see the group’s overall property portfolio top the R8 billion mark.
“This yield-enhancing acquisition is in line with our strategy of acquiring quality enhancing properties, which offer opportunities to extract additional value through redevelopments and refurbishments. This diversified portfolio has GLA of 340,221m² and spans retail, office and industrial with minimal vacancies of 0.8% and a weighted average lease expiry of 4.5 years,” said Petersen.
Dipula’s current portfolio comprises 174 properties valued at approximately R7 billion, with a total gross lettable area of 757,363m² including retail, office and industrial properties. The portfolio being acquired comprises two retail properties in Gauteng – Chilli Lane Shopping Centre and Chilli on Top; six office properties across Gauteng and the Western Cape and two redevelopment properties. The transaction also includes the acquisition of a 50.01% stake in a company owning a portfolio made up predominantly of industrial properties across KwaZulu-Natal, Eastern Cape, Mpumalanga, Gauteng and North West.
“This acquisition is a further step in our consistent growth path which has seen our portfolio grow over 300% since listing. It will see our property portfolio surpass the one million square metre mark in GLA, as well as R8 billion mark in terms of the value of our overall portfolio,” said Petersen.
The transaction date is anticipated to be 1 May 2018, but the acquisition remains subject to certain conditions precedent.