Delta Property Fund has signed an agreement with Chipcor Developers to sell its property and land at the corner of Hargreaves and Hockley Close in the Buffalo industrial area in Qonce for R13m.
Chipcor Developers is a subsidiary of Chippa Holdings, which owns Chippa United football club.
Delta was selling any noncore assets that no longer aligned with its strategy, it said in a Sens announcement on Tuesday.
The property was auctioned to swiftly offload underperforming assets that were affecting overall performance, primarily due to high vacancy rates and limited prospects for improvement in the existing market.
The proceeds from the sale will be used to reduce debt and lower vacancy rates 1.1 percentage point to 32.3%. Delta also expects the sale to reduce annual operating costs, directly improving its return on investment.
While being bought through his company the new owner of the property is Chippa United Football Club founder and chair Siviwe Mpengesi. The transfer is expected to be finalised in February.
The transaction includes a nonrefundable deposit of R1.3m that has already been received and the balance, which is secured by guarantees, will be payable on transfer.
Last month, Delta announced plans to sell five properties for R63.6m, with the proceeds intended for debt reduction and to decrease vacancy rates. The properties, situated in Boksburg, Silverton, Marshalltown, Mbombela and Durban, are no longer considered strategic to the company.
In early May, Delta, which primarily leases to government tenants, completed the sale of three properties for R105.1m. The properties sold were 5 Walnut in Durban, Sediba, Fountain & VLU Buildings in Bloemfontein, and Cape Road in Gqeberha. With Jacqueline Mackenzie
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