Delta Property Fund yesterday announced the proposed disposal of five properties across South Africa for a combined R63.6 million, as it continues to streamline its portfolio and reduce debt.
By 1.30pm the share price soared 8.00% to 27 cents on the JSE.
Delta has signed separate sale agreements with five independent buyers for each property, located in Boksburg, Silverton, Johannesburg, Nelspruit, and Durban. The properties are non-core assets that have experienced high vacancy rates, contributing to underperformance within Delta’s portfolio.
The sales agreements involve the following transactions:
- 67 Middle Road, Bardene, Boksburg, sold for R10.8m.
- 244 Vonkprop Road, Silverton, sold to Tupelostax Investments for R2.8m.
- 25-29 Rissik Street, Johannesburg, sold to Guder Properties for R18.5m.
- 17 Henshall Street, Nelspruit, sold to Aberaha Trading for R8.5m
- Leasehold rights to 260 Monty Naicker Street, Durban, sold to Bemath Poverty Alleviation Trust for R23m.
Delta said the rationale behind these disposals is to offload properties with persistently high vacancy rates and limited recovery potential due to market conditions. This strategic shift is expected to reduce Delta’s vacancy levels by 2%, dropping from 33.4% to 31.4%, equivalent to 25531 m² of vacant space.
Additionally, proceeds from these sales will go toward debt reduction and lowering annual operating costs, which Delta anticipates will enhance overall returns on investment.
Earlier this month, the REIT announced it had disposed of non-core assets for R33m.
In May Delta reported that for the financial year ended February 29, 2024 profit from operations increased significantly from a loss of R226.1m in the prior financial year to R399.2m for the year under review.
BUSINESS REPORT