What's been the driver? ApexHi chairman Marc Wainer says he honestly doesn't know. "It's crazy... we never expected such phenomenal growth in such a short time."
Wainer says the units are being traded quite aggressively by hedge funds, which immediately "understood and liked" the structure.
Although ApexHi's three separate listings - A, B and C shares - all feed off the rental income generated from one property portfolio, the C units are regarded as a riskier bet than the A and B units, as they only start sharing in payouts once ApexHi's distribution exceeds 300c (280c is expected in the year to end-June).
Until that happens investors are chasing capital growth alone. So the big question is whether there's any share price upside left.
Macquarie First South Securities property analyst Leon Allison says it's difficult to value ApexHi C stock on a shorter-term, yield-relative basis as it's not yet delivering a return and will have a highly geared yield growth profile when they start accruing income.
But on a longer-term valuation the share looks expensive. Allison says he's therefore cautious to recommend ApexHi C at current levels while much lower risk stocks, such as Growthpoint, Emira, Sycom and Hyprop, still offer significant upside.
It seems that some ApexHi C shareholders also regard the stock as fully priced, with four of its black empowerment shareholders last week deciding to cash in. Four empowerment entities sold their respective stakes in ApexHi C to two of the remaining empowerment partners for a tidy profit of R18,7m each (R74,8m collectively).
The C units were created partly as a vehicle to facilitate an empowerment deal without diluting income for existing ApexHi shareholders. So when ApexHi listed its C units in October 2006, 30% of the units were sold to empowerment partners at R2/unit.
Half of those went to the KwaZulu-Natal-based Mehta family's Clearwater Capital and the remainder to the ApexHi BEE Trust, which is represented by five partners, four now having bailed out, leaving the 30% empowerment stake in the hands of only two entities - Clearwater Capital and DEC Investment Holding Company.
Initially, the expectation was that the empowerment partners would only unlock value five years after listing once there had been sufficient growth. However, ApexHi CEO Gerald Leissner says the rapid increase in the C unit's share price has created the opportunity for its empowerment partners to realise the five-year objectives within just six months.
