INSURANCE group Liberty Holdings on Monday said it would sell Greenacres shopping mall in Port Elizabeth in an undivided 50% share each to property owner Acucap and property management group Sycom, for just over R1bn.
Liberty said the transaction supported its strategy of becoming the leading wealth management company on the African continent.
The group said there were numerous initiatives that were being considered as part of its direct property investment strategy.
“These will include the upgrade, restructure and acquisition of assets within the portfolio that management believes will, in time, benefit investors,” Liberty said.
The Sycom Property Fund is managed by Acucap. Acucap owns 33.5% of the units of Sycom. The sale of Greenacres was subject to approvals from competition authorities in South Africa.
Acucap said it was looking to invest in individually large, low-risk acquisitions, particularly in the retail property segment. It is a 27.5% co-owner of the adjoining retail centre situated at Greenacres, which is called The Bridge at Greenacres.
“Acucap already has a meaningful investment in this node, and an intimate understanding of its performance,” Acucap said on Monday
Greenacres and The Bridge together make up an 88,000m² combined regional shopping mall, which is one of the major retail offerings in the Eastern Cape.
Greenacres sits at the corner of Cape Road and Langenhoven Drive, the intersection of Port Elizabeth’s two primary arterial roads. Acucap said this meant that Greenacres drew from the city’s major residential areas.
“There is a complete representation of the major South African national tenants across all retail segments, making Greenacres the mall of choice for approximately 1-million shoppers per month,” Acucap said.
It said Greenacres had high foot counts and trading densities and that there was strong interest from many of the national tenants at Greenacres to expand their trading platforms.
“Greenacres has unutilised bulk available for expansion, and with its experienced retail team, Acucap is confident that it will be able to fulfil the expansion needs of Greenacres’ national tenant base, within the context of a general modernisation and upgrade of the mall,” Acucap said.
Acucap said that its co-ownership of The Bridge gave it intimate understanding of the retail dynamics of the node and created the opportunity for value-adding operational and redevelopment activities between Greenacres and The Bridge, to the advantage of tenants, owners and shoppers.
Greenacres would be transferred in the first quarter of 2014.
Senior portfolio manager at Old Mutual Investment Group Evan Robins, said Acucap-Sycom had reacted well to competition in Port Elizabeth.
“I think it is significant. The developer, Billion Group, who has a relationship with listed fund Rebosis, is developing a very sizable 87,000m² new shopping centre, Bay West, in Port Elizabeth slated for completion at the end of 2014,” Mr Robins said.