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South Africa: Orion to Use Isando Sale Proceeds for Growth
Real estate news By Nick Wilson
25 October 2007
LISTED property company Orion Real Estate, formerly Alpina Investment Holdings, said yesterday it had sold an industrial complex in Isando, Johannesburg, for R34m in cash, and would use the proceeds to invest in other property. Orion Real Estate MD Franz Gmeiner said the property, known as the SAB Complex as years ago it was owned by South African Breweries, had industrial and warehousing tenants. Gmeiner said the complex was being sold to Athema Property Holdings, one of the main tenants in the complex.
Following the settling of the R14m bond on the property, the net proceeds of R20m would be used to acquire more properties on a "leveraging basis". Gmeiner said Orion would be looking to acquire a mix of properties. Athema made an offer for the property, and Orion thought it "received fair value for the property". As it was a major tenant who made the offer, the risk of not accepting it was that in the medium term the tenant may have relocated and left the property with a large vacancy.
Gmeiner said Orion, with a market capitalisation of about R130m and property assets worth about R500m, was intent on growing. The company said in March it wanted to build the property portfolio up to a R1bn as soon as it could. It would look for a combination of office, retail, industrial and hotel properties. Orion had secured land for a R1bn multipurpose property development in Bethlehem, Free State, and would remain majority shareholder in the venture in return for providing the land and putting the project together. The Orion Group, which has the Orion Hotels unit, took over the struggling Alpina in March last year and restructured the company under the Orion Real Estate banner.
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