Loyiso Sibali

Property Reporter

JSE-listed property asset manager Madison Property Fund Managers achieved distribution growth of 6,6% to 81c for the year to December in a difficult market.

Madison, which manages listed property funds ApexHi Properties, Redefine Income Fund and Hyprop Investments, said yesterday it managed to achieve this growth despite a 14% decline in the weighted average unit prices of the funds it manages.

The unit prices form the basis for the asset management fees Madison earns.

The company also said it would launch a new fund called Phoenix Opportunity Fund.

Madison executive director Wolf Cesman said the Phoenix Opportunity Fund aimed to raise $100m in capital. The fund would invest in offshore listed property funds, focusing initially on the UK and Australia.

The fund would be listed on the Bermuda Stock Exchange as tax laws made it easier and quicker to list a property fund there.

The fund would be marketed to local investors with at least $200 000 to invest.

Cesman said he was looking to raise the funds in the next three-and-a half months.

“Phoenix will provide SA investors the opportunity to utilise local currency to invest internationally via the asset swap mechanism,” he said. “Phoenix will be structured as a five-year closed-end investment.”

Madison is proposing a merger with Redefine and ApexHi in the near future, and also wants to acquire the 30% interest held by Redefine in Hyprop. Should the transaction with Redefine and ApexHi proceed, Madison will be the internal manager of the entity that is formed.

Madison’s asset management agreement with Hyprop expires on December 31. Talks on renewal of this contract are in progress.

Asset management contracts with Redefine and ApexHi expire on August 31 next year and December 31 2012 respectively.

Cesman said Madison would like to continue to manage Hyprop.

Source: Business Day