Johannesburg - RMB Holdings (RMH), the biggest shareholder in FirstRand with a 34 percent stake, has agreed to buy 25.01 percent of leading property group Atterbury as part of a new strategy aimed at further diversifying its earnings and creating shareholder value.
The value of the investment in Atterbury, which developed the Mall of Africa in Midrand and has retained ownership of 20 percent of the mall, was not disclosed.
Read: RMB Holdings buys 25% of Atterbury
Voyt Krzychylkiewicz, the investment executive at RMH, said yesterday that RMH’s investment in Atterbury was not disclosed because they were still finalising the details, but they hoped by RMH’s year-end in June to be in a position to disclose more detail.
However, Krzychylkiewicz said in terms of RMH’s R80 billion portfolio, the investment in Atterbury was “not material”.
RMH said it intended to fund its investment in Atterbury through preference share funding and the financial effects of the transaction would be immaterial on the financial results of RMH over the short to medium term.
Herman Bosman, the chief executive of RMH, said its new property investment strategy met its stated objective of creating shareholder value and also further diversified RMH’s earnings base, because it would invest across the breadth of the property value chain.
“We will focus on entrepreneurial and owner-managed businesses. The strategy will involve investing in physical property portfolios as well as vertically integrated property companies, specifically with internal management teams that offer asset management, development management and property management skills.
“We will work with Atterbury and other future investment partners to assist them with capital, strategic input, networking opportunities, structural longevity and additional governance systems,” he said.
Honoured
Louis van der Watt, the chief executive of Atterbury, said as a relatively small company, Atterbury was honoured to be among the RMH stable’s other prestigious investments.
“Having developed more than 2 million square metres both inside and outside of South Africa, we are the ideal partner for RMH to capitalise on property opportunities,” he said. The approval of the transaction by the Competition Commission is the only condition precedent remaining.
RMH said yesterday it would expand its current single investment in FirstRand to create a property investment business.
The investment in Atterbury was a first step in the strategy of establishing a diversified portfolio of scalable entrepreneur-led businesses with proven track records in managing and building out property portfolios.
RMH said Atterbury would become its key development partner in its core portfolio that would target the more traditional and larger areas of South African property, principally the office, retail and industrial segments.
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