The acquisition makes strategic sense for both parties, as Sanlam is down-sizing its fixed property assets and Vukile is internalizing the management of its assets in line with international norms and global best practice.
Bellville, South Africa-based Sanlam Investments and Vukile Property Fund have jointly announced that Vukile will acquire the Sanlam Properties asset management business for R332 million, as well as an option to purchase certain properties from Sanlam Life valued at approximately R500 million.
Johan van der Merwe, CEO of Sanlam Investments, said: “The Sanlam Group’s focus is on a combination of fixed and listed property assets and it therefore makes sense for the entire function of property asset management to move to Vukile – a business which specialises and wishes to grow in this area.”
Gerhard van Zyl, CEO of Vukile said: “This, together with the proposed implementation in South Africa of the Real Estate Investment Trust (REIT) structure, will give further impetus to this approach. As for the proposed acquisition of properties from Sanlam Life, this is in line with our strategic objective of building a quality portfolio of properties with a strong contractual cash flow in order to give our unit holders meaningful capital appreciation and sustainable distribution growth.”
Following the conclusion of the transaction, Vukile will be responsible for the asset management of its own property portfolio. It will also provide property asset management services to Sanlam Life in respect of its entire property portfolio. The acquisition is subject to the fulfilment of certain conditions precedent, including but not limited to unit holder and regulatory approval.