Nick Wilson

Property Correspondent

CBS Property Portfolio, which listed on the JSE yesterday, experienced strong demand for its linked units with a large number of trades pushing the unit price up 12%.

About 750000 linked units traded during the day.

CBS, which has been operating since 1993, listed at R6,75, and the unit price consistently traded in the R7,60 band during the course of the day.

Executive director Gary Fisher said that of the R250m worth of units available, about R100m was preplaced with existing unitholders and debt providers.

Fisher said the balance, about R150m worth of units, was offered to institutional investors and private clients on a roadshow before its listing, which was oversubscribed about 7,5 times.

Fisher said that, as a result of the interest in the stock, directors had decided to issue an additional 10,4-million CBS linked units, which raised an additional R70m.

He attributed the interest in CBS to the fact that the company was bringing fresh properties to the listed property sector.

Fisher said the company also had an attractive forward yield of 10,11%. He said the interest also demonstrated "some confidence in the company’s management going forward".

CBS’s management team includes Fisher, Sean Mackay, Martin Ettin and Derek Greenberg.

Ettin and Greenberg are well-known in property circles as having been co-founders of Primegro Properties, which was previously listed on the JSE.

Greenberg and Ettin were later instrumental in the merger between Primegro and Growthpoint Properties, where they also served as executive directors.

Growthpoint is the biggest listed property fund on the JSE.

CBS’s property assets are worth nearly R1bn with a spread of properties in Western Cape, Gauteng and KwaZulu-Natal.

Mariette Warner, head of property funds at Stanlib Asset Management, said CBS was "very attractively priced" and the portfolio had "potential for unlocking value".

"Even its (CBS’s) unlisted management has a track record. Ettin and Greenberg have a lot of experience in assembling property portfolios, which is positive for increasing market capitalisation going forward," said Warner.

Andre Stadler, MD of Catalyst Securities, said CBS’s yield was attractive "considering the low yields in the (listed property) sector". Stadler said the average forward yield in the listed property sector was about 8,7%. He said the company’s property portfolio was of a "reasonably good quality".

Stadler said the company also had the opportunity to perform off a low base, particularly in the offices portion of its property portfolio.

"The prospects for the office sector are looking rosier than they were 12 months ago," he said.

Stadler said the quality of the portfolio would support the company’s ability to achieve market-related distribution growth.