Real Estate Investor Magazine South Africa September 2014 | Page 45

COMMERCIAL
REI COMMERCIAL

EXPERT Q&A

RECORD R2.7 BILLION CORPORATE
PROPERTY DEAL

S

eeff property group has successfully brokered the largest private
industrial sale and single-tenanted leaseback property transaction
concluded in the country. Worth R2.7 billion, it was concluded by
Jeremy Diamond who heads up Seeff’s Structured Sale and Leaseback
business. The deal, which took six months to complete, is one of the largest
single transactions ever concluded by a real estate agency in the country.
The transaction involves the acquisition of the commercial property
portfolio of Macsteel Service Centres South Africa, comprising over
500,000sqm of mostly industrial space by the Redefine Income Fund for
the sum of R2.7 billion. The transaction was concluded as a triple net, selfrepairing lease on a 12-year period. The transaction has enabled Macsteel
to action a strategic management decision to enter into a long term sale
and leaseback transaction with a strategic group with the view to unlocking
significant capital inflows for investment in future growth. For Redefine,
this is a significant transaction as the acquisition allows it to increase its
industrial portfolio from R5bn to R7.7 billion.
Diamond says there is a global trend towards sale and leaseback
transactions as an economically sound alternative to owning property
that is not core to the operations of the business. In the current global
financial environment, this type of transaction offers an attractive financing
alternative with the added benefit that the property seller is able to remain
in the property as a tenant with minimal disruption to its business and staff.
According to Diamond, this deal illustrates that now is the perfect time for
property owners to maximise their upside as the market is extremely bullish
for sale and leaseback transactions.
Sean Paul
Managing Director
Spire Property Management

The first change made to DeVille Centre in Durbanville under Spire’s
management was an increase in free parking time from 1 to 3 hours.
This has increased the ‘dwell’ time in the centre, with an immediately
noticeable increase in turnover for retail tenants. Pick ‘n Pay reported
an 18% increase in turnover.
Mark Stevens
Marketing Committee Chairman
SA REIT Association

REITs’ unique characteristics make them a great investment portfolio
diversifier. They combine the liquidity and accessibility of investing
in the stock market with the stability and tangibility of owning
real estate, and provide the potential of reduced portfolio risk with
increased portfolio returns.
www.reimag.co.za

Commercial
Property As
An Investment
Avenue
Mike Walters
Divisional Head
Renprop Commercial

Why is commercial property a great
investment avenue for entrepreneurs
and small business owners?
Property investment is inflation-hedged, which means
that it will either match or outstrip inflation in the long
term. The rental is a tax deductable expense in the
core business, while the risk of an unknown tenant
not paying rent on time or not looking after th