Futuregrowth Asset Management’s Community Property Fund (Comprop) is expanding its portfolio with the acquisition of two shopping centres in KwaZulu-Natal (KZN), despite the July unrest that saw shopping centres in the province targeted by looters and vandals.
The group, an arm of Old Mutual, confirmed on Monday that it has purchased the King Senzangakhona Shopping Centre in Ulundi and Murchison Mall in Ladysmith from Vukile Property Fund and Resilient, both JSE-listed retail estate investment trusts (Reits).
It did not disclose the value of the deals but said the acquisitions would expand Comprop’s portfolio to more than R5.4 billion.
The finalisation of the deals will bring the fund’s total portfolio of shopping centres to 22 and increase its total lettable area to over 369 000m2.
“We look forward to creating further positive community impact through these new acquisitions, whilst delivering strong stable long-term returns with a low degree of volatility for our investors,” Smital Rambhai, Comprop’s property manager said in a statement.
Rambhai told Moneyweb that the rise in Covid-19 vaccine uptake among South Africans, and the strategic location of the retail properties, are positive indications for growth in the short to medium term.
Despite Vukile Property Fund being one of the Reits impacted by the unrest and looting seen in KZN and Gauteng in July, Comprop said the 22 373m2 King Senzangakhona Shopping Centre suffered no damage.
The centre, which is anchored by Superspar, Game and Cashbuild, is situated adjacent to the R66, the main road running through the town.
While the 18 645m2 Murchison Mall suffered minor damages as a result of the unrest, the centre was fully operational by the date the property was transferred to its new owners. The centre is located in Ladysmith’s CBD opposite the town’s main taxi rank and is anchored by Shoprite.
Comprop, which places a key focus on community development, noted that it has previously championed upskilling members of the local communities in which it operates its shopping centres.
It said it would continue to create employment opportunities for individuals as well as opportunities for small businesses with its newly acquired centres.
“Murchison Mall has a footfall on average of 870 000 per month and is located in the hub of a CBD where the major economic activity takes place,” Rambhai pointed out.
“We anticipate that population growth will continue to rise over the short to medium term and that economic activity will improve off the current low base coming off the back of Covid-19,” he said.
“The majority of the Ulundi municipal area consists of commercial farms and the area supports a substantial agricultural community. We believe that the growth in this sector over the short to medium term will continue to create employment along with the growth in population and contribute positively to returns.”
With Eskom instituting Stage 2 load shedding over recent days, the fund manager said running a more energy-efficient ship is at the top of Comprop’s list for these properties.
“We are in the process of improving the returns for our investors through various projects such as rooftop solar and improving the energy consumption of these properties where possible,” Rambhai said.