Freedom Property Fund, which has a diverse R1.56 billion property portfolio with a strong weighting in selective residential property, expects to list on the main board of the JSE next week.
Tyrone Govender, the fund’s chief executive and a former executive director of Growthpoint Properties, said yesterday that the JSE had given it a listing date of next Thursday.
Its pre-listing statement would be published in the next few days.
Govender said the fund would be listing just over 1 billion shares at an issue price of R1 each and its listing would introduce a distinctive property capital growth investment proposition to the market.
He said the promoters and more than 600 private shareholders had taken up about 47 percent of the fund’s shareholding, which meant there would be a healthy free float of shares available once it listed. There were no major institutions among its shareholders.
“Freedom was created to provide a platform for property owners and developers to unlock the value in their development projects. With access to funding becoming increasingly challenging to secure in the current economic environment, it is Freedom’s strategy to provide a vehicle through which property owners can secure the necessary development funding,” he said.
Govender said Freedom’s focus on long-term sustainable capital growth differentiated it from investments that mainly focused on income distribution, such as real estate investment trusts (Reits). This made an investment in Freedom a defensive investment relative to Reits in the current property cycle.
He said a healthy part of the fund’s portfolio would be residential property, including student accommodation and a fairly significant amount of accommodation for miners, particularly in Burgersfort and Steelpoort.
“Burgersfort is the fastest-growing town in the country and has a healthy demand for housing in the lower- and mid-tier range,” he said.
There was strong demand for housing priced at up to R600 000. Freedom would also look at structures that would allow people to lease and own their housing over time, which fitted in with the social responsibility programmes of the mines.
Freedom’s assets comprise income-yielding properties – including Steelpoort Industrial Park in Limpopo, Wespark Palms in the Free State and Stellenbosch Industrial in the Western Cape – and developments across the office, industrial and residential property sectors.
This is complemented by a secured pipeline of five commercial developments, nine residential rental developments and two residential sale developments plus a long-term development pipeline in decentralised areas throughout South Africa.
Govender said the listing would provide a significant base for the company to achieve its phased approach to growth and to raise funding.
Freedom’s gearing on listing would be less than 3 percent and its net asset value a share about 35 percent greater than the issue price of a Freedom share.
“The discount that the listing share price represents offers unique market prospects. Freedom will unlock sustainable value and growth prospects for shareholders by capitalising on the largely ungeared value in our property portfolio. We will do this by securing reasonably priced debt funding to develop a substantial portfolio of income-generating assets,” Govender said.