Corovest International, the UK arm of SA-based Coronation Investments and Trading, is to list its property fund, CIREF, on London's Alternative Investment Market (AIM) next month.

The group intends to offer South Africans the opportunity to invest up to a total value of R110m, 30% of the R380m capital to be raised in the listing.

CIREF intends to use the capital raised on listing for completion of development projects valued at R6bn and acquisitions in the UK and Europe. It will hold 25% of the capital raised in reserve for future acquisitions.

Corovest International CEO Mike Watters said offering a large portion of the fund to South African investors was a logical step as about 30% of Corovest International Real Estate Fund had historically been owned by South Africans.

Watters said CIREF would be positioned to meet South African exchange-control regulations for asset swaps with South African institutions.

"The recent relaxation of exchange-control regulations to a R2m limit for offshore personal investment also bodes well for South African private investors," he said.

The group said its targeted annual pay out to shareholders was 4,5% of net asset value. The share is expected to float at close to net asset value at R15 a share.

CIREF has elected to list on AIM despite having qualified to list on the main LSE market. Watters said this was because of the advantages for the fund and its investors. "AIM offers all the benefits of the LSE main market, including access to capital, within a less onerous and expensive regulatory regime," said Watters.

AIM benefits from specific UK tax breaks, including capital gains tax.

It has increased its number of listed companies by 82% to more than 1500 with a total market capitalisation exceeding R500bn in the past two years.

The fund may consider a dual listing on the JSE in the next three to five years, subject to exchange control approval.

Corovest Fund Managers will manage CIREF, and hold about 15% of the fund after listing.

CIREF's predecessor, Corovest International Real Estate Fund, was formed in 2002, and it controls total assets of about R1,6bn.

The directors of CIREF said they were hoping to accumulate total assets of more than R7,4bn within the next five years. CIREF's portfolio split will initially cover lower-risk stable income properties including offices, industrial buildings and retail space in the UK and two Swiss supermarkets, as well as three retail developments across the UK.

Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge