Delta Property Fund, which has a mostly government tenant base, has sold one of its properties in Pietermaritzburg as part of its strategy to offload assets that it deems to be no longer useful.
DMFT Property Developers is buying Capital Towers in Pietermaritzburg for R65.6m from the company, which is valued at R193m on the JSE.
According to the latest financials, Capital Towers was valued at R47.1m and reported a net operating loss of R900,000.
The proceeds from the sale of the office block will be used to reduce Delta’s debt and loan to value (LTV) ratio by 30 basis points to 57.6% and reduce the vacancy level 80 basis points to 33.1%.
Delta is a JSE-listed real estate investment trust (Reit) with a diversified property portfolio valued at R7.5bn from R7.9bn in February 2022.
The fall was because of macroeconomic conditions, poor growth prospects and further weakening of office-sector demand.
The black-managed fund is one of the most empowered in the sector, with a level 1 broad-based BEE rating, maintaining its status as the dominant sovereign listed property fund in SA.
For the financial year to end-February, Delta said it had earmarked 26 properties for disposal with a market value of R787m.
CEO Siyabonga Mbanjwa told Business Day last month that selling noncore assets and optimising the property portfolio is part of its turnaround strategy.
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