One of South Africa’s most active developers has entered the UK market with a £179m shopping centre spree.
Mauritius-based New Frontier Properties has bought the 430,000 sq ft Cleveland Centre in Middlesbrough and the 400,000 sq ft Coopers Square in Burton upon Trent, Staffordshire, from F&C REIT in an off-market deal.
New Frontier is backed by South African businessman Sisa Ngebulana and is listed in Johannesburg and Port Louis. South African REIT Rebosis Property Fund owns a controlling stake in the company.
Rebosis was established by Billion Group, Ngebulana’s property development and investment company, which is the third largest shopping centre developer in South Africa. It floated in 2011.
New Frontier chief executive Mike Riley said: “The acquisition of the Cleveland Centre and Coopers Square marks the start of New Frontier Properties becoming a major UK shopping centre investor.
“These shopping centres are indicative of the sort of assets we are considering: strong, regionally dominant shopping centres with significant potential for improvement. We hope to announce further purchases in due course.”
The company has earmarked a further £121m for investment in UK shopping centres as part of a £300m war chest.
It has forecast a 7% dividend yield on its debut transaction, which represents a circa 6.75% initial yield.
Coopers Square was one of three shopping centres F&C REIT bought in 2013 as part of the £254m purchase of Grosvenor’s Shopping Centre Fund. It acquired the Cleveland Centre along with another asset as part of a £108m deal with The Mall Fund in 2011.
New Frontier has appointed London-based Waypoint Asset Management to grow its business in the UK and it is also being advised by Lunson Mitchenhall and Coady Supple.
CBRE advised F&C REIT.
