Parking in Cape Town

Parking in Cape Town a scarce commodity

Parking in Cape Town is a scarce commodity, but a new development in one of the city’s high-demand areas is offering buyers a chance to get their very own space – at a premium.

According to the latest investor presentation from Tower Property Group, parking bays which form part of its new development on Napier Street in De Waterkant in Cape Town will be sold for around R570,000 a bay.

The group is building a three-level underground parking garage, which runs along the length of the street, as part of the development, which will offer 141 parking bays for those who are willing to fork over the money to have somewhere to park.

Read on…

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Tower Property Fund - Napier Street Development

Tower Property Fund New Development – De Waterkant

Trendy and vibrant De Waterkant Village with its unique European influence is situated on the slopes of Signal Hill and overlooking Table Bay. 32 Napier, located in the heart of the De Waterkant Village niche market, with cobbled streets, sidewalk Cafe’s and the Cape Quarter Lifestyle Village:

  • 19 Luxurious residential apartments on Napier Street
  • All apartments with a parking bay
  • Storerooms available
  • Harbour/Sea, Table Mountain, Village and City views
  • Registered for a Green Star SA – Multi Unit Residential Certification

For more information:
Floor plans and unit layouts please view – www.32napier.co.za
Contact Karen Muller – Cell: +27 836570285 e: karen.muller@leapfrog.co.za

croatia retail

Croatia Retail Acquisition Information

Please see the additional information on the pending retail acquisition in the below attachments.

Croatia Retail Acquisition – Extract from Interim Results Presentation

SENS Announcement – Acquisition of Croatian Property Portfolio

Tower Property Fund – Croatian acquisition exceeding initial expectations

In July of this year Tower Property Fund announced its decision to establish an offshore presence through the purchase of a newly built office tower, VMD Block B, in Zagreb, Croatia.

The acquisition was the first in Tower’s broader strategy of establishing an offshore portfolio and has proven to be highly successful, outperforming all expectations.  In fact, Tower is now looking to increase the funds offshore exposure to a third of its total assets, with their partnership with VMD forming the bedrock of a substantial pipeline of properties within Croatia – predominantly in the retail sector.

Marc Edwards, CEO of Tower explains that Tower’s first acquisition has proved successful.  “VMD Block B has performed considerably ahead of our expectations.  The property has a 5 year head lease from the VMD Grupa and was predominantly vacant on purchase.  The property is now fully let (on paper as tenants are currently fitting out their premises) with rentals achieving expectations.
The property has let faster and more successfully than competing properties, which is testament to its premium grade quality, high green rating and excellent location.  A number of national and multi-national tenants have moved into the space.”

“On a recent shareholder tour of the property and country, shareholders were impressed by the building, particularly its world class finishes which have been installed.  Tower’s partners have an excellent name in the region given their detailed quality control which results in satisfied customers.”

Why Croatia

According to Edwards, Tower investigated offshore opportunities for a year prior to selecting Croatia as the first jurisdiction in its strategy, based on the significant opportunities identified for potential value creation.

Edwards highlights that this decision has been vindicated: “Croatia was coming off the back of an 8 year recession.  We believed the economy was about to enter a growth phase and we are pleased that  2.5% growth for the next year looks set to be achieved.   The recent tourism season was the best for a number of years, which is excellent given that this industry accounts for a large part of the economy.   Croatia is in the Eurozone (from July 2013) and is expected to convert to the Euro in the near future.  It is politically stable and is in the process of finalising its latest election.”

“Added to these macro benefits, the cost of debt in Croatia is significantly cheaper than here in SA with property yields being similar, resulting in earnings enhancement,” says Edwards.  “Croatia is a small country, which means Tower can become a dominant player and our investment in the market has been well received by Croatian authorities, investors and professionals.”

Edwards adds that a large pipeline of compelling property opportunities have been identified in the retail sector in an investment climate that is pro foreign investment with a strong legal system and regard for property rights.

“Initial results prove that we made the right choice with VMD Block B.  Not only is the property “green” – in line with our overall fund strategy of energy reduction – it is market leading and is expected to be the property of choice for larger tenants for some time to come.  We believe there is long term capital growth in this property given its quality and pricing in the market.”

Offshore diversification is in
Tower’s strategy is to seek out new markets that provide strong diversification opportunities through premium, high quality properties. Tower will however focus on Croatia and the Balkan region for the foreseeable future given its strong partnerships in the country and the greater area.   Europe offers a hedge against Rand weakness and includes numerous smaller markets where Tower can position itself as the leading participant in the territory.

Other property funds are following suite, with Attacq Limited having recently announced their partnership with Atterbury Europe in the acquisition of a one-third stake in a €259-million gross asset value portfolio of seven Serbian shopping centres– including the country’s largest mall, Uš?e Shopping Centre, in its capital Belgrade. In addition, the parties seeded a 50/50 development fund to develop a pipeline of retail real estate assets in Serbia and neighbouring countries in the Balkans.

“The South African economy, we believe, has reached its short term potential and we see risks to the down side.  We believe this view is shared by the majority of the market hence the number of South African companies, in all industries, looking offshore.  Croatia, at an opposite end of the property cycle is naturally attractive to us with our partnerships in the country being of critical importance to Tower.  Tower will continue to invest in South African properties and will remain a proudly South African investor with two thirds of our portfolio invested in the country, however we will be selective of our opportunities and will look at well located properties in popular nodes with growth potential through working the asset continuously,” concludes Edwards.

Tower Property Fund – Investments in Croatia

Tower Property Fund has purchased a newly built office tower in Zagreb, Croatia.

Marc Edwards, CEO of Tower explains that the acquisition is the first in Tower’s broader strategy of establishing an offshore operation.  “Our strategy is to seek out new markets that provide strong diversification opportunities through premium, high quality properties. Europe further offers a hedge against Rand weakness and includes numerous smaller markets where Tower can position itself as the leading participant in the territory.”

According to Edwards, Tower has been investigating offshore opportunities since last year June and through its existing in-country relationships, and following extensive research into the region, Tower selected Croatia as the first jurisdiction in its strategy based on the significant opportunities identified for potential value creation.

“While Croatia is currently recovering from the lows experienced following the global financial crisis of 2008, property prices and rentals have reduced considerably and are believed to have “bottomed out” from their previous highs pre-crisis. This shift presents a significant buying opportunity as rentals are anticipated to rise into the future as the economy grows and recent data has shown the country to be moving out of its recession into positive growth. Furthermore, Croatia has not yet seen notable economic benefit following its July 2013 inclusion in the Eurozone. This growth is expected to materialise as the country navigates towards joining the Euro currency union, possibly as early as 2020.”

“Compelling property opportunities have been identified in both the office and retail sectors in an investment climate that is pro foreign investment with a strong legal system and regard for property rights,” says Edwards.

The acquisition has been concluded through Tower’s 100% held subsidiary, Tower Europe, a newly-created company registered in Croatia.  As part of Tower’s offshore venture, the fund has partnered with Croatian specialist developer VMD Grupa, who has also acquired a 20% stake in Tower Europe.

The property purchased in Croatia is a newly built office tower – the tallest and newest office property in Zagreb – which is well situated adjacent to major bus and rail stations, and is one block away from a major highway linking Croatia to other Balkan countries.

Tower has purchased 15 floors of the 26 story property representing approximately 10 700m2 of lettable area.  280 parking bays and 250m2 of storage has also been acquired as part of the transaction.  Tower has the first option to purchase any other floors owned by the developer of the property.

The property is the newest office property in the city and is rated “A” from a greening perspective (energy efficiency).  There are no new office developments planned for Zagreb for the next 18 months and Tower expects the building to dominate the region as a result.  Already, a number of tenants from surrounding buildings have taken up space in the property as it presents world class finishes at competitive rentals.  A mix of multi-national tenants occupy the property and space has let extremely quickly.

Edwards explains, “As a first foreign acquisition, we believe we have made the right choice with the VMD KVART property.  Not only is the property “green” – in line with our overall fund strategy of energy reduction – it is market leading and is expected to be the property of choice for larger tenants for some time to come.  Tower negotiated a 5 year head lease from the seller (our new partner) as part of the sale which secures our cash flow.  We believe there is long term capital growth in this property given its quality and pricing in the market.  At an 8.5% yield the acquisition is accretive for Tower’s earnings and we believe the value will grow into the future.

What we are really pleased about is our partnership with the VMD Grupa.  VMD are an extremely well respected property owner and developer in the country which gives us a great source of comfort when operating in a foreign market.  Already, the partnership is paying dividends through our introduction to various banks and professional teams in the country.  A strong pipeline of high quality office and retail properties have been identified and we are confident that Tower can be a dominant participant in the country given its smaller size relative to larger European countries.”

Edwards emphasizes that South Africa is still the core focus for the fund and that the Croatian investment is complimentary to the portfolio. In South Africa over the last year Tower has made several office, industrial and retail acquisitions that total close to R1 billion.

The fund, which initially listed a portfolio worth R1.6 billion of retail and office properties, has grown its assets by 150% to R4 billion in the two years since listing.