PROPERTY: Fountainhead Splashes Out
Recent Western Cape Business News
FOUNTAINHEAD Property, which already owns two prominent retail properties in Cape Town, is set to further increase its footprint in the city’s southern suburbs.
Late last month Fountainhead announced details of an agreement to buy Access Park, which is nestled between Claremont and Kenilworth, for nearly R420 million.
The sellers are Momentum Property Investments and several nominee companies (which according to CIPRO are associated with property entrepreneurs Peter Cunliffe and James Angus McKay).
Access Park is a popular retail node offering mainly value for money shopping.
Fountainhead CEO Anton Raubenheimer says the Access Park acquisition is in line with Fountainhead’s strategy of acquiring “quality retail assets which are located in strong retail nodes and possess good future growth prospects.”
And it’s not like Fountainhead is not familiar with the lay of the retail land in this area. The Access Park property is very close to one of Fountainhead’s existing Cape Town properties, Kenilworth Centre.
The Access Park property should immediately kick through to Fountainhead’s bottom line. The total rentable area of the Access Park property is over 20 000 sq m’s at a weighted average gross rental of R153 per sq m.
The average rental escalation by rentable area for the property is a nifty 11% and the annualised property yield is a steady 8.7%.
The deal is interesting because Fountainhead may have been forgiven for being loathe to commit further to Cape Town (where it also owns 58% of the N1 City Mall).
Currently the group is already busy with major renovations to the Blue Route Mall (which, one must remember, is one of Cape Town’s oldest retail precinct’s having been built way back in the seventies).
Fountainhead’s annual report shows that the Blue Route Mall is currently undergoing a major redevelopment.
In his annual review Raubenheimer says the construction work on the Blue Route project started in April 2010 with the demolition of a portion of the existing building and the preparation of the new mall’s foundation and parking garage.
He says the project is on schedule with an expected completion date of March 2012. On completion the new look Blue Route Mall will have 56 000 sq m of gross lettable area with around 3 000 parking bays.
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