Synergy Income Fund is a specialised property fund which aims to buy and develop small regional shopping centres and medium-sized community shopping centres in high growth nodes of South Africa, targeting the lower LSM sector. Initially formed by Capital Land Asset Management in 2007, Synergy today has a portfolio of 15 shopping centres located in Gauteng, the Western Cape, KwaZulu-Natal, the Free State, Mpumalanga, North West and Limpopo, covering a GLA of 200 000m2. The portfolio is valued at approximately R2.4 billion, with the largest property being the R440 million Gugulethu Square in Cape Town. 74% of the portfolio is occupied by large national and listed tenants, government and major franchises. Income is also generated through assets put up for sale.

Synergy Income Fund shares are listed in A and B linked units on the Johannesburg Stock Exchange (JSE) with a market cap of R1.2 billion. A units offer risk-wary investors preferential dividends of 5% growth per annum, with B shares offering a riskier buy but higher growth potential.

In 2016, the group announced a strategic repositioning as a specialist high-yielding, high growth fund comprising retail, office and industrial assets. This was based on a decision to buy the entire issued share capital of Vukile, which will result in internalisation of Synergy’s asset and property management and the exchange of Synergy’s retail properties for Vukile’s portfolio of 29 high quality retail, office and industrial assets. The group also announced the acquisition of Arrowhead Properties subsidiary Cumulative, and a name change from Synergy to GemGrow Properties. Cumulative currently holds around 100 properties valued at R1.9 billion.

The landmark deal should increase Synergy’s market cap to around R3.4 billion, with the property portfolio rising in value to around R4.4 billion. This move is part of the group’s goal to place over 90% of assets in the most defensive and preferred property sector of retail, and to increase interest and trade in Synergy shares, which have had a history of illiquidity on the JSE.

Synergy faced a tough operating environment in 2016, with performance being challenged by increased pressure on consumers. Despite this, Synergy managed to chart a profit of R107 million, compared to a loss of R35 million in 2015. Portfolio vacancy improved from 5.6% to 4.5%, with proactive leasing reversing the upwards vacancy trend of the previous year. A unitholders enjoyed earnings of 69.75 cents per share, compared to 23.17 cents in 2015, with dividends increasing markedly.

Synergy Income Fund shares have not been an especially popular buy amongst JSE-listed property stocks, but most investment analysts agree that the bigtransactional deal on the table should benefit investors. The move will enhance Synergy’s scale and asset quality, whilst injecting the expertise of respected property company Arrowhead. Ahead of the move, Synergy Income Fund shares could well be a bargain buy at the current low Synergy Income Fund share price.

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We have made it simple to buy JSE listed firm shares online. The easiest way to buy Synergy Group shares or stocks is to; start by submitting the ‘BUY THIS SHARE’ form. Next, one of our experienced and certified stock brokers will personally get in contact with you to discuss your custom stock request. Finally, a stock advisor will confirm the amount of shares you are looking to invest in Synergy Group and assist you with the setup and management of your stock portfolio account.

1. Start by Filling in the BUY THIS SHARE form.
2. Insert your name, email, telephone number and monthly remuneration.
3. Then, Indicate the amount you are looking to invest in Synergy Group.
4. Click the “ INVEST NOW” button
5. Once we have received your info, a dedicated stock advisor will personally call you back to discuss your personal share request.
6. Lastly, your newly appointed personal stock advisor will handle all account setups and reporting as stipulated by the financial services board of South Africa (FSB)

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