Acucap's blue-chip bid pleases experts

Posted On Wednesday, 23 May 2007 02:00 Published by eProp Commercial Property News
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Acucap announced the deal this week for proposed acquisition of a blue chip

Leon AllisonListed property loan stock company Acucap Properties' proposed acquisition of a R565 million blue chip.

Office property portfolio in Johannesburg illustrates continuing price increases for quality portfolios in the commercial sector, analysts say.

Acucap announced the deal this week.

The analysts said it was becoming harder for listed property companies to acquire quality properties.

Macquarie First South property analyst Leon Allison said the acquisition would not be cheap.

"It's a quality portfolio and it's going to become harder to acquire good portfolios at decent yields

There is a continual compression of property yields as there is significant capital chasing a limited pool of investment grade stock."

He said the deal was not necessarily expensive if one took a medium to longer term view.

"These kinds of portfolios don?t come along often. You are not going to pick up this kind of portfolio cheaply.

This transaction highlights the continual increase in prices for quality portfolios," said Allison.

Catalyst Fund Managers MD Andre Stadler said that on a pure yield basis investors would battle to find property opportunities.

"They are going to have to take a longer-term view on future rentals and the resultant value of property assets."

Another feature of the transaction was that the only way Acucap could make it yield enhancing was by funding it with equity.

Angelique de Rauville, MD of Investec Listed Property Investments, said finding a "sizable portfolio like this" was like "finding hens' teeth".

Last modified on Thursday, 24 April 2014 14:59

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