Reinventing the retail property space

In the listed property sector, female CEOs are a rarity.

But having risen through the ranks to chief operating officer at Old Mutual Property and establishing Stanlib Direct Property Investment, Amelia Beattie now heads up JSE-listed real estate investment trust (REIT) Liberty Two Degrees (L2D).

L2D, which was formed last year after Liberty spun off some of its property assets into a separate portfolio, has stakes in some of the most iconic retail real estate in the country, including in Sandton City, Nelson Mandela Square, Melrose Arch and Eastgate. 

Becoming CEO is but one of many achievements.

Beattie has spearheaded a number of African funds, is founder of the Women’s Property Network (WPN) Education Trust, and served as President for the South African Property Association (SAPOA) from 2014 to 2015. 

Asked what made her choose property as a career path, Beattie laughs. “I didn’t choose it, it happened by accident.”

It was a culmination of events that started with her first job, that of collecting rental at Riverside Mall in Nelspruit. 

“I didn’t even know the industry existed when I started out. We have plenty of work to do to make the property industry known to kids choosing a career.

The property industry has so many opportunities.

It houses so many different disciplines; asset management, property management, shopping centre management, leasing, development or valuations,” she says.

Property investment routes are not as well known as they should be and there is much work to be done to make that message as simple as possible, says Beattie.

“Everyone wants to own property. It’s a primal need. Few people know that you can own property apart from buying a house. They need to understand the different ways of investing in property, what a yield is, about capital growth and about property as a good building block in an investment portfolio.”

The impact of online shopping 

The South African property sector can pride itself on its assets, says Beattie. “Many of our assets can compete against any international asset, but the industry needs to keep on reinventing itself to ensure that it stays relevant to its customers. If we don’t, customers will go elsewhere.”

Remaining ahead of the curve calls for innovation and understanding of the online shopping environment, she adds. 

South Africa has not really felt the impact of online shopping but Beattie points to international trends that show the importance of dominant locations when retailers consolidate and downsize.

“We can’t wait for it [online shopping] to hit us before we do something. We need to do things now that will ensure that we answer to the needs of the customers and create different types of experiences in our environments to attract customers.”

For L2D, innovation lies in creating a “third place” in its environments. “A ‘third place’ is where people want to be; want to be seen; want to meet their friends,” she explains. 

Outlook

Since listing in December 2016, L2D’s share price has dropped around 22%. Evan Robins, listed property manager of Old Mutual Investment Group’s MacroSolutions, says the fund listed at too expensive a price and has since corrected.

“Furthermore, specific trading conditions in some of L2D’s large malls were tougher than the market envisioned. This, in addition to tougher national retail conditions in general, may be a factor in the fall in the share price,” Robins tells finweek.

“The fund’s structure is also an impediment to its rating. Apart from being managed externally, L2D own a portion of an existing Liberty portfolio and Liberty can sell them increased portions of this portfolio over time,” explains Robins. 

Beattie says L2D will remain true to its strategy of investment into high-quality local retail assets that stand the test of time. There is no strategy to move away from retail into other sub-sectors.

“We are retail specialists. That is what we know, what we are good at and we believe in sticking to that,” she states.

Nor will the REIT be venturing offshore. Beattie believes in the growth and performance that can be generated out of L2D’s local portfolio: “Good underlying quality and a robust asset base underpins our performance which we believe will see us through tough times.”

Growth, she says, will come from development projects that will also generate new rental. Bringing new “third place” trends to its environments specifically through dining and entertainment offerings is another area that Beattie envisages will grow the REIT’s assets.

A pet project

Finding vehicles that would drive education investment in an innovative way is Beattie’s pet project.

“There is so much money available to invest in education which is lost because it is not appropriately invested and spent,” she tells finweek.

“I am deeply passionate about education and one of the things I want to do is to find an investment vehicle that can make a real difference to education. Not everyone learns in the same way and the education system needs to adapt to that so that there is something for everyone.”

This is an edited extract of an article that originally appeared in the 14 December - 17 January edition of finweek. Buy and download the magazine here.