Cape Town-based investment company Trematon Capital is not letting its cash burn a hole in its pockets. Late last year Trematon issued new shares to investors to raise R120m of fresh capital. At that stage Trematon director Arnie Shapiro the fund raising exercise was aimed at capitalising on the company’s “substantial pipeline of investments” – most notably the sprawling leisure development at subsidiary Club Mykonos Langebaan (CML.)
Shapiro went on to explain that Trematon’s cash resources were not sufficient to capitalise on all of these opportunities without a substantial increase in the level of borrowings. He said the R120m meant the company could fund the existing investment pipeline over the next 12-18 months without taking on excessive levels of debt.
Trematon’s latest interim results offers a peek into the pipeline – especially plans for upgrading CML. Trematon reported that the ‘Boatyard at Mykonos’ development - which started in 2011 was nearing completion and was proving a popular and viable storage and boat service facility (complements the well established Club Mykonos Marina.) The entire development comprises 236 ‘garages’, a warehouse and related commercial activities.
More intriguing, though, is that the first major residential development at Club Mykonos for several years has commenced. This might, in CBN’s opinion, be the first signs that the efforts to create an Industrial Development Zone at Saldanha is starting to have a tangible effect on the West Coast economy.
The ‘Marina Village’ is situated on the water’s edge adjacent to the yacht moorings and will consist of 25 luxury waterfront simplex and duplex units. Trematon says the development is scheduled for completion by the third quarter of 2016. In addition, Trematon noted that one new beachfront restaurant (Marc’s Beach Bar) started trading recently, and was expected to be a popular addition to the existing service offering.
Trematon is also seeing some interesting activity in its 67% owned Aria Property Fund. At the end of March Aria spent R203m on a portfolio of Cape Town properties – including the Northgate Office Park and North Wharf. Trematon said the Northgate Office Park redevelopment was nearing completion and was expected to be completed and fully occupied by the end of the financial year. The building is well located on the N1 highway in Cape Town close to the Koeberg interchange.
Trematon’s 50% stake in the Resi Investment Group, which focuses on residential real estate in the Western Cape, has also made further acquisitions. Trematon said the portfolio had shown excellent growth in both rental income and the capital value of assets.
Encouragingly Trematon noted, “The residential property market in the Western Cape has been very strong in this segment.”
The vibrant residential market in the Western Cape, however, has proved a double edged sword with Trematon pointing out that the amount of stock available at suitable prices has reduced causing the rate of acquisition of new assets has slowed down. Trematon, though, reiterated it was committed to the local residential market and was confident the portfolio would continue to grow.