Black economic empowerment (BEE) styled property fund Rebosis is on course to swoop a R1bn office property portfolio which includes the iconic IBM building at 124 Main Street in Johannesburg.
Announced in December last year the proposed acquisitions was given a go ahead by Rebosis unit holders this week with 99.9% of votes cast approving the acquisition of the Nthwese property portfolio and capital raising thereof.
The portfolio consists of five properties with a combined gross lettable area (GLA) of 67 952 m2 and virtually no vacancies located in established nodes within the Johannesburg and Pretoria CBDs offering direct access to public transport routes and infrastructure.
The deal came to cement Rebosis’ comparative advantage in pulling deals of this nature. The property fund with assets valued around R4.5bn came to the JSE with an overwhelming bias towards the retail sector as anchored by two large shopping centers, Hemingways and Mdantsane Mall, located in East London. The group did come with a small office exposure but promised to grow this exposure partly on the back of its BEE credentials which allows it capture government tenanted office buildings. This is the latest in a string of acquisitions showing Rebosis muscle in this lucrative space.
Commenting about the approval of the Nthwese portfolio Rebosis CEO Sisa Ngebulana said ”We are humbled by this overwhelming support”.
He added “The linked unitholders’ approval provides us with the option to raise up to R1.080 billion in fresh capital from the market. It is unlikely that we’ll raise the entire amount through equity though”
“We are able to attract debt at preferential rates and are currently in the process of optimising the funding structure. We should be able to come to market on the equity side in the next couple of weeks.”
The Rebosis announcement said the Nthwese portfolio is dominated by national and provincial government with an element of blue chip corporate tenants. The portfolio is underpinned by long-term leases expiring in 2019 and 2020, providing linked unitholders with predictable revenue streams with low forecast risk.
“The acquisition is yield enhancing and supports our strategy to acquire large, preferable single-tenanted buildings in nodes attractive to government and big business.” Ngebulana concluded.
In a circular to shareholders released recently Rebosis said “This quality property portfolio consists of long-term leases expiring in the years 2019 and 2020, providing linked unitholders with predictable revenue streams with low forecast risk. The acquisition properties are well located in established nodes within the Johannesburg and Pretoria CBDs”.
The properties include, 99 Market Street, 189 Schoeman Street, 64 Eloff Street, 18 Rissik Street, 124 Main Street and the iconic 124 Main Street.
An ex IBM Building from the 1970s, 124 Main Street continues to be popularly known as the IBM Building. Rebosis described the building as a hi-tech CBD multi-storey office block, with basement parking. It is heavily engineered concrete shell with brick panel infill, central tower lift and services lobby core and is twenty one storeys high.