In the News
TRP121: Notification of an acquisition of a beneficial interest in securities – SENS Announcement
September 18th, 2014
Failed deals raise questions – Business Day
September 8th, 2014
Vukile Property Fund withdraws from acquisition discussions with Synergy – Eprop
September 4th, 2014
Vukile withdraws from discussions with Synergy – Property Wheel
September 3rd, 2014
Synergy is a specialised retail property fund with a specific focus on medium-sized community and small regional shopping centres in high-growth nodes.
Synergy was formed by Capital Land Asset Management (Pty) Limited in 2007 and listed on the Johannesburg Stock Exchange in December 2011. Synergy currently has a market capitalisation of approximately R1.3 billion comprising of A and B linked units. Synergy’s current portfolio comprises of 15 shopping centres situated in Gauteng, KwaZulu-Natal, Western Cape, Limpopo, North West and Free State valued in excess of R2.4 billion with a gross lettable area of 199 032m2.
Synergy’s A linked units have the same features as the typical JSE listed A linked units with bond characteristics providing investors with a preferential claim to distributions and a 5% growth year-on-year for 5 years – thereafter at the lower of CPI or 5%. B linked units receive the residual net income after settlement of the A linked unit distribution entitlement thereby providing investors with a leveraged investment in the growth of Synergy’s portfolio.
Specialised Specialised retail fund focused on community and regional shopping centres Growth Focus Synergy is focused on the high growth, lower LSM retail sector Income Investment Low-gearing, high-cash cover and long-lease expiries provide significant security of income Direct Active Management Synergy ensures direct active management of all centres
Specialisation Focused specialisation will drive superior, sustainable investment performance in listed property income funds in South Africa Synergy specialises in medium-sized community and regional shopping centres Retail Assets Quality community and regional retail assets Located in the dominant rural and township nodes Lower income retail offers defensive qualities with high growth and strong trading densities Mix of national tenants is comparable to premium urban centres
Changes in the Consumer Landscape Upward movement amongst black South Africans in terms of per capita income - with average income increasing by 180% over the decade since 1998 - and in terms of movement into higher tiers of the economic pyramid. It is anticipated that this rising middle-income segment will increase to about 22 million people over the next 20 years. The social security system has stimulated the upward movement of about 500 000 households from the bottom to higher tiers of the economic pyramid. LSM Trends The shift of large numbers of people up the income scale is creating a change in the country's consumer base. This positive trend, supported by the impact of social grants, has increased the financial stability within previously less well-off consumer environments, which now appear more resilient to economic changes. The improvement in the national consumer landscape emphasises an emerging black middle class that, since 1994, has grown at about 50% per year and now makes up 59% of South Africa's middle income group - of which about 53% live in townships. This has resulted in higher levels of retail demand within previously disadvantaged areas.
76% of Synergy assets are low LSM by GLA