JSE-listed Dipula Properties has agreed to acquire a portfolio of shopping centres from Moolman Group and its co-investors in a R2-billion transaction that is accretive from day one and advances the company’s focused growth strategy.

The transaction strengthens the company’s national retail presence and enhances portfolio diversification, adding nine assets across four provinces.

It also brings Dipula’s acquisitions over the past 12 months to 14 assets bought for R3-billion, as the company continues to execute its strategy of disciplined, targeted, value-accretive growth.

Concurrently, Dipula has completed a private placement, securing subscription commitments of R1.1-billion in new equity.

The new Dipula shares are expected to be listed and start trading on the JSE on September 1.

Dipula will deploy the equity raised, together with existing debt facilities, to fund the acquisition.

Once the transaction is implemented, Dipula’s loan-to-value ratio will remain at between 35% and 40%, well within its target range, the company highlights.

The announcement of the transaction also brings to an end the cautionary under which Dipula shares have traded since May 22.

CEO Izak Petersen says the transaction advances Dipula’s strategic objective of expanding its portfolio through the selective addition of well located, quality, convenience township and rural retail assets.

“The acquisition is strategically aligned with our portfolio strategy and reinforces Dipula’s commitment to uplift communities by providing accessible, everyday shopping experiences. This is not growth for the sake of scale. It is disciplined, selective growth that strengthens the quality and diversification of our portfolio and is accretive from day one,” he explains.

Dipula is acquiring the portfolio at a blended yield of 9.3%, which is below the company’s weighted average cost of capital, assuming a mix of about 40% debt and equity funding.

“The strong support for our equity raise also demonstrates investor confidence in our strategy, our disciplined approach to capital allocation and the growth path ahead,” Petersen points out.

The portfolio spans nearly 90 000 m² of income-producing retail space, let to a base of national tenants, including Checkers, Shoprite, Game, Cashbuild and Makro.

Dipula is acquiring a 50% stake in Lephalale Mall, in Limpopo, which is the portfolio’s largest asset by size and value, accounting for about a quarter of the transaction value. The Moolman Group and one other partner will retain the remaining 50% in Lephalale Mall.

Other Limpopo assets being acquired are Checkers Centre Polokwane, City Centre Polokwane and Great North Plaza, in Musina.

The portfolio also includes two assets in the Free State – Bloemfontein Makro and a 50% stake in Sasolburg Mall (formerly Sasolburg Junxion) – as well as two assets in Gauteng – Kaalfontein Corner, in Tembisa, and Rand Steam Shopping Centre, in Richmond.

Game Centre Vryburg, in North West, completes the geographic spread of the portfolio.

“We are pleased to undertake this portfolio transaction with the Moolman Group, with whom we have a long-standing relationship and have done extensive business in the past in the form of joint ventures and acquisitions and disposals.

“Dipula is growing in a disciplined manner, with a clear focus on target assets, earnings accretion, sustainable returns and maintaining a robust balance sheet.

“The support received through the equity raise reinforces our confidence that we have the right strategy and the financial capacity to continue pursuing targeted growth that creates long-term value for our shareholders and the communities we serve,” Peterson says.