The merger of Africrest Properties and StandOut Properties has been some time in the making. The two companies have been purchasing buildings together over the past three years.

 

Africrest has doubled its portfolio size in the last two years by predominantly growing its office portfolio in the northern suburbs of Johannesburg. This growth can be attributed to a few factors, one major factor being their “Tenant Profit Share Model”, whereby Africrest sources and purchases buildings for larger tenants. This model enables tenants to receive a free profit share in the building while still paying a market related rental. This is an ideal scenario for tenants as they have the advantages of owning a property, but assume no responsibility for the asset, other than paying rental timeously.

 

This is an incredible opportunity for tenants to both leverage off Africrest’s extensive experience, network, balance sheet and property management abilities as well as take part ownership in a property. “Tenants can use their money to grow their business while still having ownership in the property” says Justin Blend, co-founder of Africrest.

 

Another notable factor pertaining to Africrest’s success is its successful and well-established relationship with its primary funders, Futuregrowth. “When your funders understand the way you do business and keep a close eye on the way the business is run it makes the funding process a lot smoother”, say Nicholas Katsapas, co-founder of Africrest Properties.

 

In just under four years StandOut have accumulated 17 properties. Its focus has been on lower to middle income residential buildings as well as B and C grade office buildings. StandOut has built a solid skill set for acquiring, redeveloping and managing this type of asset. In addition, StandOut has a strong in-house property management team which has been built from scratch and further boasts vacancy rates of below 1% and a bad debt ratio of below 0.2%. “Getting the in-house property management up and running was our biggest challenge, but now is one of our biggest strengths”, says Grant Friedman, co-founder of StandOut Properties

 

Both companies have excelled in their respective fields in terms of asset growth and property management. The combined staff will exceed 25 members and will continue to maintain their low vacancy rates which are currently below 2% and ensure that the properties are maintained to the high standard required.

 

As part of the merger, StandOut brings its development pipeline of two sizeable residential developments in Bramley and Milpark. Greg Blend, co –founder of Standout Properties says “these two developments will not only bring an additional 600 residential units to the existing 350 units in the portfolio, but will also make us one of the largest developers along the Corridors of Freedom”.