What is multi-tenanted property?
A multi-tenanted property consists of a number of tenants situated on one property; typical examples are industrial parks and shopping centres.
What is the nature of a multi-tenanted investment?
Entrepreneurs often identify multi-tenanted properties, but do not have a sufficient deposit required by a commercial bank. Business Partners Limited will consider partnering with such an entrepreneur on the basis of contributing with the entrepreneur to qualify for bank funding. The shareholding will be based in accordance to the equity contributed by each party.
How does the financing of multi-tenanted properties work?
Each of the parties (Business Partners Limited and the entrepreneur/s) pools the equity (deposit) and a commercial bank will finance the balance. The equity is normally in the format of a shareholders loan account that may be redeemed once the cash flow permits this.
What are the benefits of purchasing commercial or industrial property as an investment?
Acquiring premises for investment purposes offers benefits such as long-term capital appreciation, reliable, market-related rental income and the possibility of a post-retirement income from the property.
What services are offered in the case of a multi-tenanted property?
Business Partners Limited has a dedicated property team with specialist knowledge. The team will assist in the viability analysis, negotiating a transaction, and utilising a team of specialist – often the case when a building needs to be erected.
The entrepreneur does not need to be involved in the management of the property. Business Partners Limited’s property management division is contracted to manage the property. This includes maintenance, administration and tenanted placements.
What is the typical profile of multi-tenanted properties that are suitable for investment?
This varies from industrial parks (where the size of the units will cater for SMEs) to suburban or smaller regional shopping centres. The total value of these properties would be between R4 million to R75 million. The current average value per transaction is approximately R20 million.
How do entrepreneurs get involved in multi-tenanted investments?
The entrepreneur identifies the property and has a reasonable portion of the required deposit available. Business Partners Limited will use a specialist team to work with the entrepreneur on the due diligence and put a proposal on the table for all parties to consider. Business Partners Limited will forward the proposal to a bank for 1st bond consideration.
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