Prices, capital flow may fetter Sycom

Posted On Wednesday, 27 August 2003 02:00 Published by Commercial Property News
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Property unit trust heavyweight Sycom Property Fund may have to adjust the offer price of the new units to be issued in its capital-raising exercise given the recent weakness in listed property stock in general.

Angelique de RauvilleSycom plans to develop its portfolio with acquisitions, investments and refurbishments worth about R500m.

 Angelique de Rauville, managing director of listed asset management company Provest, which is part of Investec Bank and does monthly reports on the listed property sector, said there was a possibility Sycom would have to adjust the new unit price because of the softening in the property sector and a consequent flow of capital to general equities.

 She said there had been a rally in the general equity market after an 18-month slump domestically and abroad.

 Investors wanting to diversify their investments were now not only looking at the listed property sector for opportunities, but at the equity market as well, De Rauville said.

 Sycom announced recently it had concluded about R500m in property deals, which would increase its market capitalisation to about R2,2bn.

 Sycom said the agreements had been concluded for the acquisition of two land holdings for R35m and their development at a combined cost of R294m plus investments totalling R174m into two of its existing properties.

 Sycom said these acquisitions, developments and investments would be funded by a combination of equity to be raised by unit placement and debt.

 However, there was speculation aplenty in the market yesterday that Sycom wanted to price the units at 9,30c, but may have to lower this to 9,10c because of this new move on the part of investors to equities.

 However, Sycom MD Gerald Nelson said yesterday he was not in a position to comment on pricing because the property unit trust was trading under a cautionary at the moment.

 Nelson said he would be able to provide pricing details by early next week.

 The property deals include a R150m office development Sycom is financing in Cape Town's central business district.

 

Last modified on Saturday, 10 May 2014 12:48

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