On 24 October 2012 the Competition Tribunal conditionally
approved the acquisition of a portfolio of eleven commercial
properties of SA Corporate Real Estate Fund by Fairvest Property
Holdings Limited. The reasons for the approval were subsequently
issued on 7 November 2012.
Fairvest currently owns a number of commercial properties in the
Eastern Cape, Free State, Gauteng and KwaZulu-Natal provinces. SA
Corporate Real Estate Fund, in turn, is a diversified real estate
investment fund with assets in retail, office and industrial
properties situated in the major metropolitan areas of South
Africa.
The Tribunal found no geographical overlap between the
parties' activities as their properties are located in
different geographic nodes and therefore do not compete in the same
market. Three of the shopping centres that form part of the
acquired portfolio have, however, entered into lease agreements
with existing anchor tenants that contain certain exclusivity
clauses. The Competition Commission raised the concern that these
agreements, due to expire in 2013 and 2014, may prevent small
businesses from gaining access to rentable retail space in the
respective shopping centers.
The Tribunal took these concerns into consideration, as well as
certain undertakings given by the parties to the merger, and
approved the transaction subject to the condition that Fairvest
will negotiate with the anchor tenants in the relevant shopping
centres with the aim of removing the exclusivity clauses in their
lease agreements.
Source
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
