Specialist retail real estate investment trust (Reit) Vukile Property Fund has bought the Pan Africa Shopping Centre located in the Alexandra township of Johannesburg for the price tag of R669 million, a move it says will strengthen its investment ties in the country.
The JSE-listed property company will be acquiring the shopping centre from current owners the Pan Africa Development Company – which is partly owned by Atterbury Property, Talis Holdings and Summit Ridge Trading 5.
The 16 000m2 shopping centre is set to undergo expansion, a development that will see it add an additional 9 000m2 of retail space. The new development is scheduled to be completed in the first quarter of 2024.
Vukile says the transaction will be processed in two parts, the first which is the sale of the existing shopping centre structure, will be bought for R414.6 million. The second phase which is essentially the acquisition of the expanded development, will cost the Reit R254.3 million.
Vukile CEO Laurence Rapp says the Pan Africa Shopping Centre acquisition forms part of the Reit’s plans to reinvigorate growth in its core markets.
“In early 2022, we successfully restarted our growth in Spain, and now we are particularly pleased to resume the growth of our South African portfolio with this major investment in Pan Africa Shopping Centre,” adds Rapp.
“By acquiring this asset and its future extension, we are deepening our core investment strategy in South Africa and adding value for our stakeholders.”
A ‘landmark’ development
The Pan Africa Shopping Centre was built in the late 2000s and was officially unveiled by former president Jacob Zuma in 2009 as part of the City of Johannesburg’s Alexandra renewal project.
The mall is also known for being the first centre in Johannesburg to be built with a fully integrated 50 000m2 taxi rank and is anchored by Pick n Pay-owned food chain Boxer. Other big brand tenants include Clicks, Jet, Pepkor-owned Ackermans, Truworths and Mr Price Group stores including Mr Price and newly acquired Studio 88.
“Pan Africa Shopping Centre is an excellent asset for the Vukile portfolio, which is concentrated in the sweet spot in the SA retail market, with significant exposure to strongly performing township and rural shopping centres,” says Vukile managing director for South African operations Ithumeleng Mothibeli.
“As is typical of our assets, it has a high percentage of essential services tenants, which further fortifies the defensiveness of our portfolio,” Mothibeli adds.
Listen to Vukile CEO Laurence Rapp speaking about the group’s shopping centres now trading at pre-pandemic levels: