Succession planning key to sustainable growth in the listed property sector

Posted On Thursday, 16 April 2015 09:09 Published by
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When Redefine Properties unexpectedly announced in August last year that founder Marc Wainer would step down as CE, shareholders no doubt had a few sleepless nights.

Marc Wainer Redefine Properties

When Redefine Properties unexpectedly announced in August last year that founder Marc Wainer (66) would step down as CE, shareholders no doubt had a few sleepless nights. Redefine is the JSE’s second-largest real estate counter, with a market cap of R46,7bn. The issue of succession had always been a concern, given Wainer’s reputation as a dealmaker and as a colourful character. But the transition under new CE Andrew Konig, previously Redefine’s financial director, has been surprisingly smooth.

In recent months, the counter has reappeared on fund managers’ stockpick lists and the share price has risen by more than 30% since mid-October. As Meago Asset Managers director Thabo Ramushu puts it: “Konig has made an effort to engage with investors, which has endeared him to many.”

It probably helped that Wainer stayed on as executive chairman to mentor Konig and provide strategic direction. Another sector personality who will be difficult to replace is Resilient Property Income Fund cofounder and MD Des de Beer The formidable De Beer has been instrumental in the group’s rapid growth.

However, there is plenty of young talent in the broader Resilient stable. The one counter whose shareholders don’t appear to have any qualms about succession planning is sector heavyweight Growthpoint Properties The company is highly regarded for its progressive corporate governance and disclosure stance. Estienne de Klerk, recently promoted from executive director to MD, has long been seen as heir-apparent to CE Norbert Sasse. Both are chartered accountants who joined Growthpoint 13 years ago. At the time, the portfolio was worth R1,5bn. Today, assets under management are touching R100bn.

De Klerk confirms that succession planning is a “massive priority” for the board, particularly given the rapid scale of the company’s growth. “We have developed a deep bench of experienced property and asset managers. Our aim is to always have at least one or two potential candidates to take up every divisional director’s position should the need arise,” he says. Share incentive schemes, mentorship and training are the key to retaining top staff.

Growthpoint’s aggressive acquisition and takeover strategy has also boosted skills levels. The recent acquisition of Acucap Properties is a case in point. The deal, which becomes effective this month, will add not only another R18bn worth of assets to Growthpoint’s existing portfolio but also Acucap’s experienced management team. Says De Klerk: “Our growth strategy is to acquire both portfolios and expertise, but often we want the people more than the buildings

Last modified on Thursday, 16 April 2015 10:35
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