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Cape Town - Castleview Property Fund [JSE:CVW] has listed on the Retail REITs sector of the JSE’s AltX board.
Castleview is the 20th company to list on the JSE this year.
Donna Nemer, director: capital markets at the JSE, says the introduction of Real Estate Investment Trusts has not only brought South Africa in line with international best practice, but also helped to stimulate further growth and investor interest in listed property.
Over the past decade listed property companies have raised nearly R220bn in capital on the JSE.
The real estate investment trust (REIT) structure, which was introduced on the JSE in 2013, gives property companies enhanced tax efficiency as tax is payable by the end investor. REITs must also pay at least 75% of their taxable earnings available for distribution out to investors as dividends, which gives investors certainty that net income will be paid out them.
Shares in listed REITs can also be traded quickly and easily, while direct investment in property can be much less liquid.
Castleview is a property holding and investment company that is invested in the Pier 14 shopping centre in Port Elizabeth, a regional shopping centre in the Eastern Cape. Castleview’s strategy is to invest in a diversified portfolio of retail properties in South Africa, providing exposure to consumers from a cross-section of income categories.
James Templeton, CEO of Castleview, says he is excited about the prospects for the company and its ability to create a leading retail fund.
“The retail property sector has been one of the outperformers in the South African market for a number of years, with government grants underpinning consumer spending, notwithstanding tougher economic conditions," said Templeton.
"Castleview’s growth strategy will focus on net asset value and total return on investment, for which a growing NAV and healthy income stream is required and we aim to build a portfolio anchored by high quality national tenants with long term leases, generating escalating turnover for the company.”
The latest listing brings the total number of REITs listed on the JSE to 38. These companies have a total market capitalisation of approximately R524bn, constituting 3% of the JSE’s total market capitalisation.
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