Texton Property Fund has sold Alrode Industrial Park in Gauteng for R50m as part of its strategy to exit the industrial property sector.
Measuring more than 17,000m2, the property has a weighted average rental of R34.36.
At the end of June 2022, the audited book value of the asset was R55m, with unaudited net rental income for the six months ended December sitting at R2.271 817m.
“The recycling of capital will provide flexibility for future opportunities to diversify investment into other asset classes, which appear attractively priced,” said the company in a statement.
Texton, which was listed on the JSE in 2011, has been selling some of its assets to repair its balance sheet and invest in other asset classes. It owns properties in SA and the UK as well as international investments, mostly in the US.
At the end of December, its direct SA portfolio was valued at R1.73bn and the UK R472m, with international property investments having increased from R189m in December 2021 to R538m.
Funds from the disposal will be used to pay off debt and diversify its investments. In SA, the company said it would continue to invest capital into its existing portfolio to reposition and repurpose assets to attract and retain small and medium-sized enterprise office tenants.
For the six months to end-December, Texton’s loan-to-value, a key measure of the financial health of a property company, fell from 31.2% in December 2021 to 26.9%. Long-term debt was reduced by R319m, of which R186m is a permanent decrease in long-term debt. Texton has R279m, excluding debt facilities.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.