Arrowhead acquires Residential Portfolio from Standard Bank

Arrowhead Properties has acquired a property letting enterprise and its related immovable properties situated at 55‚ 57 and 59 Glover Road‚ Honeypark Extension 20 in Honeydew on the West Rand‚ from Standard Bank for an aggregate purchase consideration of R150m.

The immovable properties comprise 333 residential units‚ all of which are let to Monash South Africa in terms of a triple net lease. Monash in turn sublets the units to students who attend the university.

Arrowhead CEO Gerald Leissner said the acquisition furthers the group’s strategy of expanding its residential property portfolio and‚ at a forward yield of approximately 12%‚ is in line with its focus on distribution-enhancing acquisitions‚

After the implementation of the acquisition and the previously announced Jika acquisition‚ the group’s residential portfolio would be worth about R550m.

Arrowhead said it intended to continue to explore opportunities to grow its residential portfolio to give unitholders exposure to what it considered a high-growth sector of the property market.

The company said that at about 1% of the listed sector compared with about 15% in larger developed markets this sector was underrepresented in the South African listed sector.

The transaction is subject to competition commission approval and Arrowhead expects the effective date to be 1 February 2014.