Liberty prepares to list Reit on JSE

File image of Melrose Arch.

File image of Melrose Arch.

Published Aug 24, 2016

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Johannesburg - Financial services group Liberty Holdings on Tuesday announced plans to list a portion of its premium portfolio on the JSE as a real estate investment trust (Reit) with an expected net asset value of R10 billion.

Liberty said the Reit, to be called Liberty Two Degrees, would list before the end of this year. The company said it planned to raise R4bn in new capital at the listing.

It said existing Liberty shareholders would get an exclusive opportunity to switch up to R3bn of their direct property holding into a new property portfolio that would invest in the listed entity. R6bn would be from the existing property portfolio.

Liberty’s property portfolio is­valued at R30bn and includes a 75 percent stake in Sandton City, 100 percent of Nelson Mandela Square, 100 percent in Eastgate Mall and a 25 percent interest in Melrose Arch.

The listing will give investors ­access to the firm’s property assets.

Long haul

Liberty said a Stanlib team that had managed Liberty Property Portfolio for years would be in charge of Liberty Two Degrees. “The team understands the assets,” said Amelia Beattie, Liberty Reit’s chief executive.

Liberty said yesterday that it planned to invest in several African markets. But Beattie said the foray into the rest of the continent would be measured. ”In Africa you have to be in it for the long haul.”

Read also:  Liberty eyes real estate investment trust

As part of its 2020 strategy, Liberty wants to gain insurance market share in sub-Saharan Africa. The group earlier said it wanted to take advantage of the increasing urbanisation and expanding labour force in several African countries.

Beattie said the Reit had a substantial pipeline of investment opportunities and new developments to grow the portfolio within South Africa and invest in select properties in growing sub-Saharan African countries, predominantly with a retail bias. “We have the track record and expertise to do this,”she said.

Liberty said its investments in the rest of Africa would also focus on high-end commercial assets targeting multinational anchor tenants.

“Total rest-of-Africa opportunities will not exceed 10 percent of the portfolio and selected jurisdictions will ensure there can be adequate repatriation of distributions to the Liberty Reit investor base,”it said.

Liberty chief executive Thabo Dloti said the listing, which was still subject to regulatory approvals, would improve the returns profile of the company’s premier portfolio of properties. “The capital raised will enable Liberty to expand and enhance its existing portfolio of quality property assets in South Africa and sub-Saharan Africa, gain access to a far wider investor community, and significantly add to the dynamics of the listed property sector of the JSE.”

Liberty’s managing director of innovation, David Lloyd, said yesterday that existing Liberty Property Portfolio shareholders could receive a once-off pre-tax bonus of 3 percent to 5 percent, upon the listing of Liberty Two Degrees.

Liberty said the existing Liberty Property Portfolio remained unchanged. “For those customers preferring a more stable, lower risk return they will have the option to remain,” Liberty said.

Liberty shares fell 0.97 percent yesterday to close at R115.37.

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