SPEAR Reit has announced that the Company had entered into an agreement to acquire The Island Urban Logistics Park in Paarden Eiland, Cape Town for R185 000 000 from last mile industrial park specialists Inospace. The Island Urban Logistics Park is 100% occupied by local and international tenants. As supply chains and logistics services are redesigned as a result of the global pandemic and the adoption of a China plus one strategy, urban logistics parks have become attractive investment opportunities in South Africa. The Western Cape real estate sector has shown incredible resilience coming out of the Covid-19 pandemic and this latest acquisition by Spear Reit has been well timed.
Spear Chief Executive Officer Quintin Rossi noted that “The Acquisition is in line with Spear’s stated strategy to continuously increase portfolio exposure to high quality industrial real estate with a focus on logistics, urban logistics and bulk warehousing within the Cape Town Metropol as a key driver of Spear’s focussed but not rushed growth plans. The Island acquisition is a natural fit into the Spear portfolio”.
Spear’s current assets under ownership are valued at R4,48 billion; an increase of 221% since listing in 2016. Currently the Spear portfolio consists of 30 Western Cape assets, the top five (by value) equate to 48% of the total portfolio value and are spread across industrial, convenience retail and commercial real estate in the Cape Metropol. Spear’s portfolio segmentation reinforces the Company’s strategy of diversification across selected property types, while supporting a Western Cape-only strategy. This ‘Western Cape only’ approach has proved to be a sound investment strategy which demonstrates a proximity advantage with the upshot of effective asset management and efficient property management turnaround times.
The Acquisition of the Property further bolsters Spear’s high quality industrial portfolio and will meaningfully contribute to the ongoing sustainable and consistent cashflows generated across the balance of the 100% Western Cape portfolio. Spear’s current industrial portfolio occupancy sits at 98% across 247 047m2.
