Two South African Property Giants Set to Merge

February 11 - Two South African property giants are set to merge, creating a huge entity that will change the face of the market.

Dipula Property Fund and Mergence Africa Property Fund will see the creation of a new property portfolio worth R1.4 billion.

The overall lettable area of this portfolio will be 320,000 m2 and? it will boast over 500 customers throughout the country.

The newly merged entity will also boast superior black economic empowerment (BEE) credentials.

Dijalo Property Services, South Africa's first full service, black owned property services group is majority stakeholder in Dipula.

Mergence Africa is an independent black-owned and black-managed financial services company.

"The larger combined fund provides greater critical mass which improves competitiveness, economics of scale and attractiveness to asset management talent," said Izak Peterson, head of Mergence.

"The intention is to grow the fund through a highly acquisitive strategy and to take best advantage of our unique market position."

According to Saul Gumede, the founder of Dijalo Property Services: "The merger also enhances the sectoral spread of the portfolio which will comprise retail (50%), office (25%) and industrial properties (25%) with a substantial blue-chip tenant base."

He said that the transaction shows that BEE companies can make a substantial contribution to the property sector.

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2/11/2011 10:54:35 AM