Dipula sweeps East London retail development

Dipula Income Fund is set to acquire the R316m Gillwell Taxi Retail Park development in the East London CBD.

The move shows the development of the black controlled JSE listed property fund into a master of the ’emerging’ retail property market.

But then as always the devil is in the detail which is still missing for this transaction. Dipula said it was still finalising the acquisition’s financial effects.

Situated in the Buffalo City Metropolitan Municipality of the Eastern Cape province, the Gillwell Taxi Retail Park development is said to have gained planning permission in December 2013. Dipula said the transaction will become effective after the centre’s construction is complete, in the first half of 2015.

Dipula was listed on the JSE in 2011 under the guidance of a supreme trio, the second largest property fund on the JSE Redefine Properties and two black players being Saul Gumede’s Dijalo Property Group and Izak Petersen’s Mergernce Group.

Redefine has since withdrawn living Dipula to fly solo with Petersen as CEO and Gumede as executive director. The fund which listed with an asset base of R2.1bn has grown to top R4bn. Growth has come largely via a remarkable appetite for development stage projects like the R400m Eyethu Orange Farm Mall.

The company is now set to take the Gillwell Taxi Retail Park development. The company’s announcement said Dipula agreed to purchase the 21,521sqm three-level shopping centre development from developers Isibonelo Property Services and Eris Property Group. It has also agreed to give Isibonelo the option to acquire a stake in this retail centre.

Petersen said “The property meets Dipula’s strategy of acquiring larger, quality retail assets in targeted areas and improves the overall quality of our portfolio.”

“The Gillwell Taxi Retail Park development is a well located retail site in the retail hub of East London’s CBD. For Dipula, it represents sustainable income growth underpinned by major national retailers.”

Leases are being finalised with the centre’s anchor retailers Game and Shoprite.

The transaction is subject to various conditions, including 80% of the development’s retail space being pre-let and rental guarantees on any unlet space.

As part of the transaction, Isibonelo and Eris will develop the centre and will also undertake its management for its first two years from opening.

“Besides meeting our growth strategy, the acquisition also increases our exposure to the growth opportunities from commuter retail in one of the busiest CBD’s in SA,” said Petersen.

Dipula describes itself as one of the highest BEE rated companies on the JSE property sector with an asset of 181 commercial properties spanning some 577,340sqm of gross lettable area.

Its portfolio is geographically diverse across all of South Africa’s provinces, with more than 70% concentrated in South Africa’s most economically productive province of Gauteng.

Dipula’s portfolio inclines towards retail property at more than 50% by rentable area of its portfolio, which also includes office and industrial property assets. South African retail property has outperformed all other property subsectors in recent years and this has served Dipula well.



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