PROPERTY: Vunani Eyes Cape Town Office Blocks
Recent Western Cape Business News
AS the only office dominated property fund listed on the JSE Limited, Vunani Property Investment Fund (VPIF) is performing well in particularly tough trading conditions with annual compounded growth of 34.4% over the past five years. “We have achieved this growth through tight management and yield enhancing refurbishments” says CEO Rob Kane.
Kane says the fund is of the opinion that certain nodes in Cape Town offer exceptional refurbishment and growth opportunities. A benchmark for how refurbishment initiatives should work hand in glove with sustainability is VPIF’s property at 14 Loop Street in Cape Town.
“We refurbished this 1904 building according to green principles. For us it not only makes environmental sense, but the resultant savings in water and electricity consumption has made it a business imperative. We foresee that tenants will increasingly demand this from landlords.” Kane says. The fund now owns 25 buildings, with commercial offices comprising just over 95% of the VPIF portfolio, and valued at R1.3 billion. This includes three properties recently developed for tenants by Vunani Properties and acquired by the fund just prior to the listing. All the acquisition properties are A grade properties and are predominantly leased by national tenants on long leases. A recent addition to the portfolio is the landmark Foretrust Building in Cape Town’s foreshore area for a consideration of R250 million.
The Foretrust Building consists of 26 780 sq m of office space and was independently valued at R251 million in December last year. “This acquisition is in line with our strategy of acquiring yield enhancing, well located quality assets with stable income streams. We believe that the Foreshore area offers exciting growth potential with a number of large scale developments on the cards. The Foretrust Building was acquired at a yield of 11% and is well located within the Foreshore area. The building is tenanted by two state departments with six years remaining on the lease,” Kane says.
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