Publications
Partners
Johannesburg - Property investment trust Delta Property Fund is crossing its fingers that the envisaged exit of its biggest sole shareholder, Redefine Properties, will usher in an opportunity to increase its black ownership to the majority.
Delta CEO Sandile Nomvete said this week that the planned disposal by Redefine of its 22.8% stake in Delta might lead to the board buying back the shares or a female-led consortium acquiring them. He said there was an agreement with Redefine to avoid shares ending up in the hands of its competition.
“There was always a pre-emptive agreement in the Redefine transaction that the Delta board would obviously look to buy back the shares from Redefine or place them with Delta-friendly shareholders.”
Nomvete said the company was monitoring developments in government to “make sure there are no major policy shifts that may catch us by surprise”.
He said the company was looking into deploying significant capital, not to buy out shareholders, but to direct it into a BEE transaction, and the combination of the two transactions should increase black shareholding to over 50%.
“We will be one of the few companies on the JSE with at least 51% black ownership, if the shareholders of Delta approve it,” Nomvete said.
Asked if the company had any immediate plans to decrease its reliance on government leases, which form 76.4% of its income, he said: “Contrary to popular belief, government is a very stable tenant and they do pay very well in terms of meeting their obligations.”
The company listed in September 2012, has 112 buildings across the country and its latest shareholder profile includes Coronation Fund Managers, the Public Investment Corporation, Sanlam Investment Management, Stanlib Asset Management, Kagiso Asset Management and Investec Asset Management.
The company’s chief operating officer, Otis Tshabalala, said the firm had a monopoly in Pretoria’s government precinct, with a 7% vacancy rate across 10 major buildings.
According to Redefine CEO Andrew König, the selling of its stake in Delta, worth more than R1.3 billion, had nothing to do with the political exposure or possible policy uncertainties Delta may be exposed to, but is part of its strategy to exit all locally listed securities.
“The holding in Delta was acquired through the sale of a government tenanted office portfolio. As such, the stake in Delta is not strategic for Redefine. The Delta disposal completes the process of exiting local listed securities and recycling the capital into directly held local property assets,” König said, and pointed out that the decision was made earlier in the year as part of simplifying the local asset property portfolio.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
