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SA listed property resilient in 2010

Posted On Wednesday, 15 December 2010 02:00 Published by eProp Commercial Property News
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The South African listed property sector held its own throughout 2010 relative to other asset classes.

Paul Duncan

The sector also witnessed a flurry of corporate activity including acquisitions and intended listings on the JSE.

Catalyst Fund Managers investment manager Paul Duncan explained last month that these developments, specifically intended listings, are a reflection of a cyclical stage in the property market.

He says between the 2004 and 2007 peak, the market encountered a lot of activity in terms of listings from unlisted property funds and promoters who perceived the yields at the time to offer an attractive opportunity to list.

"Then there was some consolidation in the market between 2007 and 2009 when counters such as ApexHi were absorbed into Redefine Properties."

Duncan cautions that investors should balance the value proposition that any new listing offers in the long-term against the risks that the investor may be exposed to.

However, SA listed property was the best performing asset class in the year to date, recording 26.79% in total returns and 28.77% over the over the past 12 months.

Leading the pack in terms of corporate listings, property investment subsidiary of Old Mutual, Omigpi, announced this year that it plans to list a R12bn property fund on the JSE by mid-2011.

The Triangle Real Estate Core Fund will be made of 40 retail, industrial and office properties.

"The property game has moved, so we need to catch up with it and we require capital.

"We are doing this to get additional capital to grow," said Omigpi managing director Ben Kodisang at the time.

The intention was to raise five billion rand in the capital markets.

Then, the market saw the Vividend Income Fund making its debut on the JSE in November 2010.

Vividend CEO Ari Jacobson said the listing would provide institutional and private investors with an opportunity to participate in the income streams and future capital growth of Vividend while providing the company with access to capital markets and a secure platform to raise funding to pursue growth opportunities.

Jacobs said that based on Vividend's acquisition strategy, it is forecasting an annualised distribution yield to linked unitholders of 8.11% for the year ending 31 August 2011 and an annualised distribution yield of 11.04% for the year ended 31 August 2012.

Billion Group, which owns property fund known as Rebosis Property Fund, also announced that the fund planned to list on the JSE in December, subject to market conditions.

The group said the purpose of the listing is to raise capital to provide capacity to grow the size of the portfolio and unlock value in the development pipeline.

Regarding acquisitions, property fund Hyprop Investments (HYP) said early this month that it had reached an in-principle agreement with the Attfund Retail board to acquire its entire issued capital for R8.986 billion.

The deal is less the value of Attfund Retail's debt.

Hyprop will fund the deal through the issue of 112 million Hyprop combined units at R54 per unit, totalling R6.048 billion.

The balance will be settled in cash. The deal remains subject to a number of conditions including all requisite unitholder and regulatory approvals.

Capital Property Fund recently announced the planned acquisition of property loan stock company Pangbourne Properties.

The swap ratio - 2.38 Capital shares for every 1 Pangbourne share, was an effective 1% premium for Pangbourne unitholders based on the share prices on the date of announcement, which was on 3 December 2010.

Last modified on Monday, 21 April 2014 09:17

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