Sanlam lists Vukile property portfolio with R1.9bn assets

Posted On Friday, 25 June 2004 02:00 Published by eProp Commercial Property News
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Pretoria - Vukile Property Fund, the second listed initiative by Sanlam Properties, was listed on the real estate sector of the JSE Securities Exchange yesterday.

 

Angelique de RauvilleThis followed the private placement of 13.8 million linked units at an issue price of R5 each, with a yield of 12.05 percent expected for the first year.

With a portfolio comprising 52 properties and a gross asset value of about

R1.86 billion, Vukile is the seventh-largest property loan stock company on the JSE.

Linked units in Vukile were not offered to the public because the listing was fully underwritten by group company Sanlam Investment Management.

Johannes van der Walt, the chief executive of Sanlam Properties, said the firm had sold R4.4 billion worth of properties in the past three and a half years because insurers needed liquid assets. Vukile's assets made up about 10 percent of Sanlam Properties' R10 billion worth of real estate. He said the benefit of listing was the increased tradeability of the assets.

Gerhard van Zyl, Vukile's chief executive, said the fund went to market with more than 800 shareholders. Funding banks Nedcor, Standard Bank and Absa had subscribed for 13.8 million shares to hold about 7 percent of the company.

Sanlam had a stake of 68 percent at listing but would reduce its holding over time.

Vukile's diversified portfolio had a bias towards the retail sector, Van Zyl said, with the majority of its properties located in Gauteng.

The portfolio's composition, combined with fairly conservative gearing levels of a maximum loan-to-value ratio of 45 percent, created an ideal platform to pursue further acquisitions, he said.

Vukile intends to declare half-yearly dividends.

Angelique de Rauville, the managing director of Provest, the listed property portfolio management subsidiary of Investec Bank, said it was "fabulous"

that Sanlam had come to the market with a significant listing in terms of the size of its property portfolio and market capitalisation.

De Rauville said the listed property sector had been more active than any other JSE sector in the past five years in terms of the number of corporate activities that had taken place.

She said 35 funds and companies in the property sector had ceased to exist due to mergers, acquisitions, consolidations and delistings. Excluding Vukile, there had been three listings in the past year, which had contributed in excess of R3 billion worth of market capitalisation to the listed property sector.

The other new listings were Emira, Ambit and MICC Property Income Fund.

Sanlam Properties brought MICC to the market in November last year.

De Rauville said listings could be a costly exercise and it would be prudent for short-term investors to exercise caution when investing in new listings.

She noted, however, that Vukile had a solid management team and a diverse property portfolio and should deliver acceptable performance over one year relative to the market.

Property had become a more recognised asset class than it had been historically and the advantage of investing in listed property compared with equities had been taken into account by private investors and institutions.

"Those advantages are investing into bricks and mortar, with capital values underpinned by tangible assets and fairly predictable earnings and sustainable growth," she said.

"The increase in demand for stock has facilitated the ability to list new companies and funds and place new listed property paper with an increased investor base."

Last modified on Wednesday, 14 May 2014 13:38

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