Johannesburg - The picture of the listed property sector has changed dramatically in recent times, owing to large-scale consolidation having reduced the sector to 17 listed property companies.
Industry role-players reckon further consolidation could occur, specifically with regard to the merging of the large retail property funds.
The biggest merger to date in the property sector was Redefine's recent takeover of ApexHi and Madison, creating a giant with a market value of some R19bn.
This is just less than that of Growthpoint, the largest listed property company on the JSE with a market value of about R19.2bn.
The merged company has a total of 411 diversified properties countrywide with an overall letting space of 3.6m square metres.
This is the equivalent of about eight Sandton Cities, reckons David Rice, Redefine's executive director responsible for the property portfolio.
The new Redefine will list on the JSE on Monday.
Marc Wainer, joint chief executive of the new Redefine, says a merger between the retail fund Hyprop and the listed property trust company Sycom is still not inconceivable.
Redefine undertakes Hyprop's asset management and owns a strategic 29.5% stake in Hyprop. Hyprop has a 37% interest in Sycom, but Acucap also has a 17.5% interest in Sycom, as well as 50% in Sycom's management company.
A merger, however, would not be easy since, as a property trust company, Sycom cannot be taken over by the property loan stock company, Hyprop.
Corporate legislation on mergers and acquisitions is not applicable to this case because Sycom is regulated by the Collective Investment Schemes Control Act.
Wainer says Hyprop will nevertheless sit down with Acucap within the next 18 to 24 months to sort out the situation.
Brian Azizollahoff, an executive director at the new Redefine, says there are currently limited options in the market to expand Hyprop because most of the large retail assets belong to institutions, insurance companies and unlisted property funds.
Redefine is looking for opportunities to broaden its exposure overseas. It already has a 28.1% stake in Ciref, which is listed on the Alternative Investment Market (AIM) of the London Stock Exchange.
Keillen Ndlovu, joint head of Stanlib's property funds, says the Resilient Group will be listing a new property fund, the Fortress Property Fund, on the JSE in October.
"The fund will have an A and a B structure, and consist of properties belonging to Pangbourne, Capital, Resilient and private players."
As for the performance of the listed property sector, it is anticipated that weakening underlying fundamentals could have an impact on future distribution growth.
Market consensus is that growth in distributions will taper off to moderate single digits in the medium term from the high double-digit levels of the past two to three years, according to Catalyst's latest monthly report.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.