Western Cape Business News

Send  Share  RSS  Twitter  16 Oct 2008

PROPERTY: Rich 'Ore' Strike in Gordon's Bay


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GAUTENG-based property developer Orion Real Estate has bolstered its Western Cape portfolio markedly with the recent purchase of the Mountain View Shopping Centre in Gordon’s Bay.


The R10 million purchase adds to ORE’s existing Cape property portfolio, which is mainly centred on properties housing Pick ‘n Pay’s Score stores in Mfuleni, Maccassar, Rosendal and Delft.


Before the Mountain View purchase ORE earned around 12% (roughly R2.6 million) from its Western Cape properties, which comprised 16% (R29 million) of the portfolio value.


ORE, controlled by the Gmeiner family, may well be signalling an intention to take further tilts at niche Western Cape markets – especially in the current industry lull.


ORE does need to add geographic balance to its portfolio, which currently is heavily weighed to smaller properties in Gauteng and Mpumualanga.


The group also needs to secure strong rental flows as its is currently busy with a mega R2 billion retail development in Bethlehem in the Eastern Free State.


Significantly, the property was acquired at a historic net rental income yield of 9.6% - which is a fairly sound yield for a property outside a large CBD.


The rationale behind ORE’s Gordon’s Bay venture is that Mountain View is a well established shopping centre and has strong tenants like First National Bank, STAX and The Friendly Grocer to name but a few.

 Perhaps more important is that Mountain View is well positioned on a busy arterial road connecting Gordon’s Bay with the Sir Lowry Pass.


Because there is substantial unused bulk available on the site ORE has an opportunity for future development or extensions to the shopping centre.

With the Bethlehem property due for completion next year, CBN wonders whether ORE’s development ambitions will focus on faster growing Western Cape towns – where mainstream property development companies have not rushed in.

 A willingness to expand or revamp the Mountain View shopping centre in the next year may offer some clues as to whether ORE is intent on building a serious Western Cape-based portfolio. 

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