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INVESTORS COULD SOON have the opportunity to share in the spoils of some of South Africa’s premier shopping centres with talk of major retail property player Attfund making its long-awaited debut on the JSE by year-end. Attfund is one of SA’s biggest unlisted property funds, with total assets worth around R9,5bn. More than 95% of its portfolio is exposed to the retail sector, including regional centres such as Clearwater Mall (Roodepoort), the Cape Gate Retail Precinct (in the city’s northern suburbs), Woodlands Boulevard and Atterbury Value Mart (Pretoria) and the Garden Route Mall (George).
Attfund also owns a 25% stake in the Centurion Mall, together with JSE-listed Fountainhead Property Trust, and has an offshore portfolio worth around R1bn, which includes stakes in Nova Eventis in Leipzig, Germany – one of Europe’s largest shopping centres – as well as New York Stock Exchange-listed Simon Group, Deutsche Euroshop (Frankfurt Stock Exchange) and Karoo Investment Fund (Luxembourg Stock Exchange).
Attfund CE Louis Norval says a decision on the date of listing would only be made within the next two to three months, but market talk is that the listing is likely to materialise before year-end.
Under Norval’s leadership – he founded Attfund eight years ago – its portfolio has swelled more than tenfold: from R670m in 2002 to the current massive R9,5bn. Its board includes a number of industry heavyweights, such as Louis van der Watt (CEO of Pretoria-based developer Atterbury Property), fellow Atterbury directors Neno Haasbroek and Francois van Niekerk, as well as Frank Berkeley, head of property finance at Nedbank Corporate, and Sisa Ngebulana, who heads developer Billion Group.
Norval said back when Attfund was established in 2002, management already made a commitment to list the fund on the JSE by no later than end-2011. However, Norval concedes it may be opportune to list Attfund’s assets sooner rather than later, given the close range in which the yields of listed property and directly held physical property are currently trading.
It would also make sense to bring another retail-focused portfolio to the market now that Redefine Properties is planning a takeover of Hyprop Investments, the only retail niche fund currently listed on the JSE.
Norval believes there’s still plenty of investor appetite for retail property, despite consumer spending likely to only recover next year. The fact that shopping centre development hype is over – with few new regional malls currently being built – will support consolidation among retailers, says Norval. “That will create scope for strong growth in retail trading densities in shopping centres that dominate their catchment areas over the next few years.’’
Norval says it’s likely the fund’s offshore assets will be stripped out of the portfolio before listing Attfund on the JSE, as many offshore property funds are currently not paying out any income to investors.
Although Attfund is likely to be the biggest new property listing to find its way to the JSE’s real estate sector in many years, it’s not the only new listing heading for the R113bn listed property sector. Industry players said at the 2010 Sapoa convention, held at Sun City last week, they were aware of a number of property owners currently looking to list directly held property portfolios.
Norbert Sasse, CE of Growthpoint Properties, told convention delegates it made sense for unlisted portfolios to come to market in the current environment, as SA-listed property yields haven’t increased as sharply as those of their offshore counterparts. As a result, listed property and physical property are trading roughly on a par, which means there’s no yield dilution likely to occur when unlisted portfolios are brought to market.
Sasse noted there’s still a healthy appetite for SA property scrip, as the sector has held up remarkably well on the back of the global credit crisis and the recession. In fact, Sasse said SA-listed property is up 20% from its 2007 peaks – in stark contrast to Australia and Britain, where listed property is still trading 40% below 2007 levels.
In addition, SA-listed property companies are still achieving positive growth in income payouts, while many offshore property companies have cut distributions to zero to help shore up balance sheets.
Analysts and fund managers are in favour of new listings, as they create more choice for investors. Paul Duncan, investment manager at Catalyst Fund Managers, says the potential listing of Attfund is particularly good news for the sector, as it will provide easy access to high quality retail assets previously not available to JSE investors. Says Duncan: “Attfund’s assets will be a fantastic addition to the sector – provided, of course, its pricing is attractive.”
There have been only two new listings in the JSE’s real estate sector (excluding the demerger of dual-listed Liberty International earlier this month) over the past four years: hotel niche fund Hospitality Property Fund, in early 2006, and Fortress Income Fund, in October last year. Meanwhile, mergers and takeovers have seen the number of listed real estate counters dwindle from around 30 five years ago to the current 18.
Attfund also owns a 25% stake in the Centurion Mall, together with JSE-listed Fountainhead Property Trust, and has an offshore portfolio worth around R1bn, which includes stakes in Nova Eventis in Leipzig, Germany – one of Europe’s largest shopping centres – as well as New York Stock Exchange-listed Simon Group, Deutsche Euroshop (Frankfurt Stock Exchange) and Karoo Investment Fund (Luxembourg Stock Exchange).
Attfund CE Louis Norval says a decision on the date of listing would only be made within the next two to three months, but market talk is that the listing is likely to materialise before year-end.
Under Norval’s leadership – he founded Attfund eight years ago – its portfolio has swelled more than tenfold: from R670m in 2002 to the current massive R9,5bn. Its board includes a number of industry heavyweights, such as Louis van der Watt (CEO of Pretoria-based developer Atterbury Property), fellow Atterbury directors Neno Haasbroek and Francois van Niekerk, as well as Frank Berkeley, head of property finance at Nedbank Corporate, and Sisa Ngebulana, who heads developer Billion Group.
Norval said back when Attfund was established in 2002, management already made a commitment to list the fund on the JSE by no later than end-2011. However, Norval concedes it may be opportune to list Attfund’s assets sooner rather than later, given the close range in which the yields of listed property and directly held physical property are currently trading.
It would also make sense to bring another retail-focused portfolio to the market now that Redefine Properties is planning a takeover of Hyprop Investments, the only retail niche fund currently listed on the JSE.
Norval believes there’s still plenty of investor appetite for retail property, despite consumer spending likely to only recover next year. The fact that shopping centre development hype is over – with few new regional malls currently being built – will support consolidation among retailers, says Norval. “That will create scope for strong growth in retail trading densities in shopping centres that dominate their catchment areas over the next few years.’’
Norval says it’s likely the fund’s offshore assets will be stripped out of the portfolio before listing Attfund on the JSE, as many offshore property funds are currently not paying out any income to investors.
Although Attfund is likely to be the biggest new property listing to find its way to the JSE’s real estate sector in many years, it’s not the only new listing heading for the R113bn listed property sector. Industry players said at the 2010 Sapoa convention, held at Sun City last week, they were aware of a number of property owners currently looking to list directly held property portfolios.
Norbert Sasse, CE of Growthpoint Properties, told convention delegates it made sense for unlisted portfolios to come to market in the current environment, as SA-listed property yields haven’t increased as sharply as those of their offshore counterparts. As a result, listed property and physical property are trading roughly on a par, which means there’s no yield dilution likely to occur when unlisted portfolios are brought to market.
Sasse noted there’s still a healthy appetite for SA property scrip, as the sector has held up remarkably well on the back of the global credit crisis and the recession. In fact, Sasse said SA-listed property is up 20% from its 2007 peaks – in stark contrast to Australia and Britain, where listed property is still trading 40% below 2007 levels.
In addition, SA-listed property companies are still achieving positive growth in income payouts, while many offshore property companies have cut distributions to zero to help shore up balance sheets.
Analysts and fund managers are in favour of new listings, as they create more choice for investors. Paul Duncan, investment manager at Catalyst Fund Managers, says the potential listing of Attfund is particularly good news for the sector, as it will provide easy access to high quality retail assets previously not available to JSE investors. Says Duncan: “Attfund’s assets will be a fantastic addition to the sector – provided, of course, its pricing is attractive.”
There have been only two new listings in the JSE’s real estate sector (excluding the demerger of dual-listed Liberty International earlier this month) over the past four years: hotel niche fund Hospitality Property Fund, in early 2006, and Fortress Income Fund, in October last year. Meanwhile, mergers and takeovers have seen the number of listed real estate counters dwindle from around 30 five years ago to the current 18.
