Property loan stock company Dipula Income Fund, which made its debut on the JSE yesterday, plans to make acquisitions of R1,5bn-R2bn in the next few years as it grows it portfolio with the aim of attracting new capital.

CEO Izak Petersen said yesterday the fund was looking at a “sizeable chunk” of opportunities at favourable rates and that the fund had scope to expand in the next five years.

Dipula raised nearly R1,4bn through a successful private placement. Mr Petersen said the fund’s A-linked units had an initial forward yield of 9,25% for the year ending August next year. “The distribution on A-linked units would grow at 5% per annum for the first five years until the end of August 2017 and thereafter they will grow at the lower rate of 5% per annum or CPI (consumer price index),” Mr Petersen said.

Its B-linked units would offer a variable rate debenture with high anticipated growth. The B-linked units were expected to receive the residual distributable income after settlement of the A-linked unit distribution at an anticipated initial forward yield of 10,73% for the year ending August next year.

Dipula’s portfolio consists of more than 170 properties, representing good sectoral and geographical diversification.

In an interview with Business Day, Marc Wainer, the CEO of SA’s second-largest property group, Redefine Properties, said the company had confidence in the management of Dipula and supported the listing. “We have mentored them for six years now and we were also their underwriter for the listing. We are happy with the income,” Mr Wainer said.

Keillen Ndlovu, head of property funds at Stanlib, said investors with more appetite for risk had the option to invest in the B units. Investors who invest in B units earn the balance of the profits after the A unitholders have been paid.

However, Mr Ndlovu was also critical of the deal, saying Redefine Properties had benefited significantly from it.

“Redefine Properties underwrote R860m worth of Dipula stock. In return for this they (Redefine) will earn an underwriting fee of R24m, which equates to a 2,8% fee,” Mr Ndlovu said.

He said Stanlib believed that the fee was “too much”, more so given that recent deals in the listed property space had been done at underwriting or commitment fees of 1%. Rebosis recently listed at a 1% underwriting fee and Fountainhead’s recent rights issue had a 1,5% fee attached to it.

Investec portfolio manager Vuyani Bekwa said he was “impressed” with Dipula management and its approach to asset management. “We were also impressed with most of the properties that we visited, especially industrial properties and some of the retail properties in Soweto, such as the Dobsonville Spar.”

He said the geared capital structure should work well for the fund, especially if Dipula could “squeeze” operating costs.