The new units, which were introduced to help facilitate ApexHi’s empowerment transaction, have experienced strong demand, with high trading volumes reported. ApexHi CEO Gerald Leissner said the 250-million C units were issued to ApexHi’s existing A and B unit holders, 30% of which were sold to empowerment partners.

ApexHi is one of the listed property companies that have different unit structures which offer different return and risk profiles for investors. “The unusually high trading volumes were spurred by a number of institutional investors, who in terms of the investment criteria for the various portfolios managed by them, are unable to hold the ‘risky’ C units,” said Leissner.

“We expected to have high trading volumes in the first couple of weeks, but it was interesting to see such strong demand from buyers.” The C unit, which was sold to empowerment partners for R2 a unit, closed at R2,80 on the day of the listing and increased to R4,09 in the first month of trade.

Mariette Warner, head of property funds at Stanlib, said the performance of the unit was “beyond my expectations because of the higher risk attached to potential future income”. “The market clearly expects ApexHi’s portfolio to generate significantly higher than average sustainable earnings growth,” said Warner.

Catalyst Fund Managers MD Andre Stadler was also surprised by the upward price movement. “I think everybody has been taken by surprise by the appetite there has been for the C units and the effect that has had on the combined yield that ApexHi now trades on. People are expecting the growth out of ApexHi to result in the C units qualifying for income earlier than anticipated.”

The current combined unit price of the A, B and C units is about R35, compared with the combined A and B unit price of R28,80 before the listing of the C unit. The sell-off of the C unit to empowerment partners has resulted in a 10% empowerment stake in ApexHi.