In this Issue
- Where my head is at
- Dipula opens landmark mall in East London CBD
- Moolman properties boost Dipula portfolio by R860 million
- New blood on the executive
- Enhancing retail in underserved areas
- Quick to respond when opportunity knocks
- Investor Diary 2016
New developments   Recent transfers   Featured revamps   Completed developments
Where my head is at

Izak Petersen
Chief Executive Officer

To begin our first newsletter for 2016, I wish all our staff, suppliers, investors and other stakeholders a prosperous year ahead. I remain optimistic of this.

As I see it, the year past will be most remembered for two cataclysmic events - Nenegate and the Springboks’ defeat by Japan in the Rugby World Cup with a national team dominated by pensioners.

Both disasters depressed the mood in South Africa, exposing how we have misunderstood our size and might relative to the rest of the world and that irresponsible actions by our leaders can harm the entire nation, quickly. Hopefully we have learned from these events and will recognise, embrace and try to overcome our challenges going forward, turning the negative into success as we look towards better times in our country.

At Dipula our business remains fundamentally sound despite the volatility in the markets and the headwinds tearing at the local economy. We are pleased to have recently taken transfer of two major acquisitions which escalated our portfolio value to approximately R7 billion (see ‘Dipula opens landmark mall in East London CBD’ and ‘Moolman properties boost Dipula portfolio by R860 million’).

We continue to reduce vacancies, especially within the retail portfolio, and offices and industrial are also at acceptable occupancy levels. We are forging ahead with our portfolio growth strategy through improving acquisitions and well-timed sales. Currently we have approximately 200 assets in our portfolio. We have further identified certain properties as long-term holds and earmarked under-utilised properties for extension and strategic revamp to unlock value potential. We are confident that these measures will contribute to continually improving portfolio quality and strength.

In addition, we are continually enhancing property management following a part internalisation of this function. At the executive level we welcomed onboard our new CFO, Ridwaan Asmal in September 2015, who replaced Brigitte de Bruyn. Ridwaan is a seamless fit with the team and I look forward to developing our working partnership further.

Although the year ahead will undoubtedly be challenging, we at Dipula refuse to be dampened by negative sentiment or threatened by slow economic growth in South Africa. We will continue to focus on delivering good results while looking after our assets and our people.

Dipula opens landmark mall in East London CBD

Dipula’s R325 million Gillwell Taxi Retail Park has become a landmark in the East London CBD in only five months. On opening day – 12 November 2015 – 29 000 shoppers visited the centre and most tenants traded. Footcount for the month of November totalled 300 000, rising to 0,5 million over the festive season and sustaining a healthy 324 000 in January 2016. Vee Mazambani has been appointed centre manager.

Anchored by Game and Shoprite, and with nearly 80% of tenants being national retailers, the Retail Park offers an attractive shopping environment in contrast to the fragmented and informal competition in the area. The development comprises a
22 260m² three-level shopping centre that integrates seamlessly with the Gillwell Taxi Rank, the city’s main public transport hub. It is well positioned to capture the East London CBD and commuter foot traffic, offering a modern, one-stop, weatherproof shopping environment with an extensive variety of new retail for the area.

Petersen says Gillwell Taxi Retail Park is a portfolio-enhancing asset, “which we believe will become a crown jewel in our property portfolio in time. The development will serve a wide community comprising of not only commuters but also residents or workers in close proximity."
Moolman properties boost Dipula portfolio by R860 million
As previously announced, we acquired an 80% share of the Moolman portfolio, effective 1 August 2015, which will add 28 low-vacancy properties totalling 66 000 m² to our portfolio. The Moolman portfolio is valued at R860 million at an initial yield north of 10%. (SENS published 18 August 2015.)

The predominantly retail portfolio has almost fully transferred to Dipula (98%). The few outstanding properties are due to transfer by end-March 2016. The largest Moolman asset is the 50% stake in the 15 000m² Seshego Circle in Polokwane, Limpopo, anchored by Shoprite and Cambridge Food, worth R113 million. The portfolio also includes a 10 400m² value centre in Soweto anchored by Builders Warehouse. Other national tenants across the portfolio include Pepkor, Nedbank, Absa, Truworths, Shoprite, Game, Boxer and The Foschini Group.

This transaction has cemented a promising partnership between Dipula and The Moolman Group, which bodes well for capitalising on further opportunities in the future. The Moolman Group is a respected industry player with a focus on assets and expertise aligned with Dipula’s.

The Moolman Group will continue to manage the property portfolio going forward. Within Dipula, Devon Beynon will be responsible for asset management. We welcomed Devon to our team in September 2015 and are confident that his extensive experience in the sector will greatly benefit our portfolio. He previously worked for Finlay and Associates and Redefine Properties.

Ridwaan Asmal
Chief Financial Officer
New blood on the executive

To follow on from above, we extend an official warm welcome to our new CFO Ridwaan Asmal.

Ridwaan brings to the board 20 years’ experience in the listed proper sector, with specific skills in financial reporting and management, acquisitions, disposals, treasury and hotel property development. He previously worked at Anglo American Property Services, Broll Property Group and CORONIB Asset Management and prior to joining Dipula in September 2015, served as Financial Director of Hospitality Property Fund since 2006.

Enhancing retail in underserved areas
As you will recall, in 2014 Dipula acquired six shopping centres from Redefine Properties that included Soweto-based malls Meadowpoint, Proteapoint, Dobsonpoint and Pimville Square. The centres are well-located with attractive long-term anchor leases and available bulk, offering considerable potential to unlock further value. Our value programme kicked-off initially at Dobsonpoint when we added a very successful KFC drive-through.

Now tenant demand for extended space has spurred the R60 million revamp and extension at Proteapoint. The programme will include retail improvements as well as the add-on of two levels of residential units atop the mall. The Pick n Pay will be enlarged and the entire centre re-tenanted with a focus on tenant mix. We are also negotiating with a government service centre to occupy a new box. We further intend to add another fast food drive-through and a hardware store.

Continuing with our upgrade of Dobsonpoint, the centre will be getting a R3 million ‘facelift’ and the current weak tenant mix will be enhanced. The refurbished centre will offer the opportunity to command higher rentals while providing the local community with a better shopping experience.
Quick to respond when opportunity knocks
At the end of 2015 we completed the overhaul of the defunct Renaisance Park building (formerly Crownwood Corner) in Ormonde, Gauteng, part of our legacy portfolio. We have proudly unveiled the R50 million Renaissance Industrial Park, with Massmart secured as the tenant.

While the property had originally housed a FMCG retailer with a 10 year lease, the opportunity faded when the tenant went into liquidation. We then created an opportunity to significantly improve prospects for tenancy by razing the building. Construction on a new warehouse began in March 2015. The property now comprises modern light industrial warehouses designed with wide turning circles for maximum circulation. Over 50% of electricity is derived from solar power, with full back up power in place.

Our Pick n Pay in Ivory Park is now complete and continues to trade exceptionally well, currently boasting amongst best trading densities in our portfolio. To capitalise on another situation “reeking of opportunity” we extended the store for added convenience and foot traffic, adding more trading space, storage room, a bottle store and various ATMs.
Investor Diary 2016
Financial year-end 31 August
Interim results SENS 11 May
Analyst presentation JHB
Hyatt, Rosebank: 08h30
Analyst Presentation CPT
Grand Westin, Cape Town CBD: 16h00
12 May
Site visit
[Details TBI]
Annual results SENS 9 November
Analyst presentation JHB
Hyatt, Rosebank: 08h30
Analyst Presentation CPT
RadissonBlu, Cape Town CBD: 16h00
10 November
Copyright Dipula 2016
All Rights Reserved.
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Dunkeld Park, 6 North Road
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In this Issue
- Where my head is at
- Dipula opens landmark mall in East London CBD
- Moolman properties boost Dipula portfolio by R860 million
- New blood on the executive
- Enhancing retail in underserved areas
- Quick to respond when opportunity knocks
- Investor Diary 2016