Promenade doubles in value under Orion

The Promenade Shopping Centre and Hotel has nearly doubled in value since being acquired in April by Orion Real Estate.

Orion Real Estate, listed on the JSE, acquired the Nelspruit property for R33m at an 18% yield.

Franz Gmeiner, MD of Orion, says the asset has been revalued at about R60m. He says Orion Hotels, which is part of the Orion Group, had been tenants in the hotel building and that “when the property became available we saw it as a good investment opportunity”.

The retail and office component of the centre is 7500m². The four-star hotel consists of 72 bedrooms and conference facilities.

“Nelspruit is already well-serviced by the conference market and there is a strong drive by the leisure trade seeking either holiday or overnight accommodation as they travel to destinations further afield,” says Gmeiner.

Orion Real Estate, which has a property portfolio worth R450m, plans to increase its asset base to about R1bn over the next 12 to 18 months.

Business Day - November 2006