Palm Grove Shopping Centre
Corner of Main and Church Street | Durbanville | Cape Town | 7551
LETTER OF INTEREST DEADLINE 07 OCTOBER 2021
Neighbourhood centre with high-quality retail and office space
Diversified tenant mix, with blue-chip national anchor, Spar, on a 10-year lease
Situated in the heart of Durbanville, a middle to high-income suburb of Cape Town
Benefits from excellent accessibility and high levels of foot traffic;
First year’s forward Net Operating income of approximately R5.5 million
The property is located in the heart of the Durbanville CBD, on the corner of Main Road and Church Street and enjoys good visibility and access from both frontages.
The property is surrounded by numerous amenities that generate high levels of footfall to the centre. These amenities include; Durbanville Nature Reserve, Durbanville Golf Club, Educational Institutions (Durbanville Preparatory, Primary and High School) as well as sprawling and rapidly growing suburbs to the north of Cape Town.
The property comprises of 7,704 sqm of GLA and is currently 87% occupied. The retail component of the asset measures 6,854 sqm (which is 92% occupied), while the office component measures 851 sqm and is currently 48% occupied. The vacancy levels have declined due to the recent conclusion of a lease with a church “Tygerberg Gesinkerk” which accounts for 1,652 sqm of the rentable retail area.
The property is located in the heart of Cape Town's northern suburbs, in the wellestablished Durbanville node. Durbanville is a middle-to-high-income residential suburb. The property benefits from high levels of passing traffic, along Main Street, a major arterial that links the northern suburbs of Cape Town to the N1 Highway. The property also benefits from many amenities in the immediate area, including educational institutions, recreational facilities, parks and other businesses.
The centre is anchored by a blue-chip national tenant, Spar (including a Tops Liquor) with a total GLA of 1,789 sqm. Spar have recently signed a 10-year lease expiring on 31 December 2029. Spar have the right to renew this lease for an additional five-year period. This centre is a two-storey building (with a third floor servicing the office component) with a Z-shaped design comprising of retail stores on the ground and the majority of the first floor with office space on a portion of the first and third floors. Palm Grove provides open, on-site parking. The owners are in the process of remedying a parking ratio infringement.
The building is made up of concrete frame with plastered brick infill walls under a pitched IBR clad roof on wooden trusses. Shop fronts are inset with aluminium clear glazed windows and shop fronts. Floors are concrete with various floor coverings to tenant’s specifications. Shops are mostly plastered and painted with ceramic tiled floors and suspended ceilings inset with flush fluorescent or spot lighting.
Zoning and Title Deed Information
Erf: 4791, Durbanville
Registered Owner: Government Employees Pension Fund
Title Deed Number: T17384/2004
Local Authority: City of Cape Town Municipal Area
Total Land Area: 7,008 sqm
Total GLA: 7,705 sqm
Zoning: General Business 2
Floor Factor: 2.0
Parking: 6 bays per 100 sqm of GLA
Building Lines: Street Boundary 0m-10m height, 4.5m above 10m. Common Boundary 0.0m
|Description||Number||Area (sqm)||Area (%)|
Competing retail centres
|Competing centre||Distance from Palm Grove (km)||Size (sqm)|
|De Ville Centre||0.3||9,098|
|The Village Square||0.4||10,800|
|Ipic Shopping Centre Sonstraal||3.7||8,303|
|Glengarry Village Shopping Centre||4.9||10,561|
|Graanendal Shopping Centre||5.0||4,450|
Top Tenants by Area
|Number||Tenant||Area occupied (sqm)||Contribution (%)|
|1||Spar Group Limited||1,791||23.2%|
|4||Rank Real Estate||491||6.1%|
|Number||Tenant||Rental Income||Contribution (%)|
|1||Spar Group Limited||R194,622||24.5%|
|5||Pen Café Stationers||R54,737||6.9%|
The Spar Group Limited (SPAR) is a South Africa-based company, which offers retail merchandising and field marketing services. It is a wholesaler and distributor of goods and services to SPAR grocery stores, Build it builders’ merchandise outlets, TOPS at Spar liquor stores and multiple other branded group retail outlets in Southern Africa, Switzerland, Ireland and South West England. Spar offers three categories of retail services, such as syndicated services, project services and dedicated services. Spar now operates out of six distribution centres, servicing over 1,000 Spar stores across Southern Africa.
01 January 2020
31 December 2029
Current Monthly Lease Rent
R 181,889 (R 101.65 per sqm)
Net operating income
FIRST YEAR NOI
|Period March 2022 - February 2023|
|Gross income (ZAR)||15,679,492|
|Gross Expenses (ZAR)||10,200,134|
|Net Operating Income (ZAR)||5,479,359|
- Assumed renewals to various leases expiring during the budget period based on the discussions with the property managers and their views on the tenants.
- Assumed 6 month let up to 539 sqm of the vacant retail space at R70/sqm. No rental income has been assumed for the vacant office space (443 sqm) due to limited recent esquires for the space.
- A full breakdown of the projected NOI is available upon signature of an NDA, along with tenancy schedules, rent rolls and plans where available.
The Seller has been registered for VAT (Value Added Tax). It is intended that the sale will be treated as a transfer of a going concern, provided that the purchaser is registered for VAT and the requirements for going concern are met in terms of the VAT Act, No. 89 of 1991.
In this stage of the process interested parties are requested to submit a non-binding Letter of Interest / Intent (“LOI”) to the JLL Empact JV by no later than -
12h00 on Thursday 7 October 2021. Bids are to be submitted electronically to the email addresses of the agents provided herein in the template LOI format provided in the Downloads tab below. Please note that late electronic submissions will not be considered by the PIC.
To submit these LOIs the following Stage 1 property information is available under the Downloads tab:
A downloadable Information Memorandum (which is a summary of the information contained in this property information page);
- A comprehensive Stage 1 Process Letter (setting out the two-stage Private Tender Process in greater detail);
- The Seller’s template / standard Letter of Intent / Interest (“LOI”);
- The Sellers’ standard Non-Disclosure Agreement (“NDA”). The NDA must be completed if the purchasers wants to view a detailed Tenancy Schedule (if applicable and available).
Bidders will also be allowed to view the Property, provided 48 hours’ notice is given to the JLL Empact JV.
To download any of these documents you’ll be required to register to become a subscriber to the South African Property Exchange (SAPX).
Stage 1 LOIs / bids will be assessed by the Seller and thereafter a select number of bidders will be given permission to participate in Stage 2 of the process. In Stage 2, select bidders are given access to a comprehensive Stage 2 due diligence data room to conduct a more extensive due diligence exercise. FICA or KYC verification will be required and submission of binding offers will be done via the ClicktoPurchase functionality on SAPX or via the submission of PDF signed copy of an approved sale and purchase agreement directly to the agents. The agents will provide selected bidders with instructions that outlines how offers are to be submitted via ClicktoPurchase® or direct submission by providing select bidders with a detailed Stage 2 Process Letter.
In Stage 2 bidders have up to 6 weeks to conduct their DD and submit final binding offers.
Bids will be accessed on four main criteria:
- Ability to perform / track record
- Conditionality (i.e. speed of performance)
- Timing of electronic submission of offer.
No information, statement, description, quantity or measurement contained in any sales particulars or given orally or contained in any webpage, brochure, catalogue, email, letter, report, docket or hand out issued by or on behalf of the JLL Empact JV or the vendor in respect of the property shall constitute a representation or a condition or a warranty on behalf of the JLL Empact JV or the vendor. Any information, statement, description, quantity or measurement so given or contained in any such sales particulars, webpage, brochure, catalogue, email, letter, report or hand out issued by or on behalf of the JLL Empact JV or the vendor are for illustration purposes only and are not to be taken as matters of fact. Any mistake, omission, inaccuracy or mis-description given orally or contained in any sales particulars, webpage, brochure, catalogue, email, letter, report or hand out issued by or on behalf of the JLL Empact JV or the vendor shall not give rise to any right of action, claim, entitlement or compensation against JLL Empact JV or the vendor. All bidders must satisfy themselves by carrying out their own independent due diligence, inspections or otherwise as to the correctness of any and all of the information, statements, descriptions, quantity or measurements contained in any such sales particulars, webpage, brochure, catalogue, email, letter, report or hand out issued by or on behalf of the JLL Empact JV or the vendor.