Burstone Group partnered with Flanagan & Gerard to acquire the strategic retail asset, with each owner holding a 50% stake in the centre.
The process for the R380m acquisition began when Burstone Group exercised its first right of offer over the property owned by Investec, following the management internalisation process that saw the transition of Investec Property Fund into the Burstone Group in 2023.
The deal marks the second transaction between the two property players in recent years. In 2020, Flanagan & Gerard acquired a 50% stake in Musina Mall, Limpopo, from the then-Investec Property Fund, together with Moolman Group, which increased their share to 50%.
Flanagan & Gerard is known for its distinctive hands-on approach to retail property and will take on a strategic asset management role for The Neighbourhood Square, complementing the highly accomplished asset and property management structures.
Graham Hutchinson, managing director of Burstone Group South Africa said: “The Neighbourhood Square is a strategically important asset, and the acquisition reflects our priorities of focusing on property fundamentals and collaborating with best-in-class partners, such as Flanagan & Gerard. The deal is a great example of our strategy to deliver income and capital growth over the long-term.”
Paul Gerard, MD of Flanagan & Gerard Property Group, said: “We are delighted that the transfer of The Neighbourhood Square is now concluded and to be co-owners of this asset with respected real estate investor, Burstone Group. The extremely popular centre has quickly established an enviable trading track-record and has a waiting list of new tenants. It is a great match for our portfolio, with the opportunity to unlock value over time.”
The Neighbourhood Square is a newly developed, open-air convenience retail center that is dominant in its node. In a very short time, it has established operating fundamentals and trading metrics, including zero vacancies. It has 86% national retail tenants and the formidable strength of dual anchor tenants, Checkers and Woolworths.
The asset enhances the respective portfolios of its new owners, and there are plans to build on the centre's success with general improvements and retail mix refinements, making the customer experience at The Neighbourhood Square even better. New retailers recently added to the centre’s appealing lineup include Thule, JJ Cale, and Wellness Warehouse.
The new co-owners share a deep commitment to renewable energy initiatives and will be adding additional rooftop solar panels above Woolworths.
