HYPROP EXITS SYCOM WITH R2,3 BILLION ACQUISITION OF SOMERSET MALL
Leading JSE shopping centre fund, Hyprop today announced its R2,3 billion acquisition of Somerset Mall from Sycom Property Fund (“Sycom”), in line with strategy to invest in sizeable quality shopping centres.The purchase consideration is being settled by the transfer of 81 500 000 Sycom units to Sycom, which will clear the way for Hyprop to exit its investment in Sycom.
Hyprop CEO Pieter Prinsloo says: “Not only are we pleased to have acquired a high quality regional shopping centrethat complements our existing portfolio,but also that it has provided us the opportunity to convert an indirect investment into a direct property asset.” The purchase consideration equates to 32,8% of Sycom units in issue, or 97% of Hyprop’s holding in Sycom. The remainder of Hyprop’s holding will be disposed of subsequent to the effective date. “The transaction allows Hyprop a clean and complete exit from the Sycom investment, in line with our stated objective.” The effective date of the transaction is 1 October 2013.
The acquisition remains conditional on regulatory and Sycom unitholder approval as well as the conclusion of the purchase by Sycom of the remaining 50% stake in Somerset Mall which it does not hold. Sycom has received an offer from AECI Pension Fund to buy the remaining stake for R1,15 billion and has indicated its intention to accept the offer.
The successful conclusion of the acquisition will also see the withdrawal by Hyprop of legalproceedings against Sycom regarding the disputed general issues of Sycom units.
Prinsloo is confident that Hyprop’s experienced management team will be able to extract value from the centre going forward.“On conclusion of the acquisition, Somerset Mall will rank as the third largest asset in theportfolio in terms of value behind Canal Walk and Clearwater Mall.”
Somerset Mall is situated alongside the N2 freeway and services Somerset West, Strand, Stellenbosch, Gordons Bay and Macassar. The 66 317 m² centre boasts close to 200 shops with anchor tenants including Woolworths, Edgars, Dion Wired, Game, Pick n Pay and Dis-Chem and featuring a wide variety of food, fashion, beauty and specialist stores.