By Suren Naidoo
The JSE has a new retail-focused Real Estate Investment Trust (REIT) on its main board, with the McCormick family listing newly formed, Exemplar REITail Limited, on the bourse today. The REIT debuted on the JSE with a maket capitalisation of just over R3 billion.
Exemplar REITail was created from the core of McCormick Property Development (MPD) – one of South Africa’s leading retail developers and investors, which has over 35 years of experience in the development and management of rural retail centres. MPD was started by John McCormick and is now led by his son, Jason McCormick.
“Exemplar REITail will focus entirely on the ownership and management of township and rural retail, with no development arm within the company, thus removing development risk for investors,” the company said in a statement on its listing today.
Jason McCormick, CEO of Exemplar REITail, said the new retail-focused REIT would continue to work alongside MPD and would have first right of refusal for all their developments going forward, subject to approval from the Exemplar’s Investment Committee.
The MPD development pipeline currently stands at over half a million square metres of retail potential (at 2017 market demand estimates), with an average size of over 20 000sqm per development.
Exemplar listed with a property portfolio value of just over R5.5 billion. The fund has 20 retail properties, with three further shopping centres currently under construction, that will be added to the portfolio once completed within the next 2 years.
“We are the only fund in South Africa focused purely on emerging market retail and are unique in that every one of the 20 operational properties in the fund were developed by MPD. The same team that has managed them since their respective openings, will still continue to do so,” said Jason McCormick.
“Having pioneered the development and management of retail in these areas over 35 years ago, and with the Exemplar management team having a combined 238 years of employment at MPD at the time of being internalised into Exemplar, it is safe to say that the team’s experience in this niche of the retail market is unprecedented,” Exemplar said in its statement.
Added McCormick: “This level of experience in the industry, plus a historical understanding of our assets and the market within which we operate ,should produce great comfort to investors looking for new opportunities in the REIT space.”
Exemplar REITail Limited has put together a heavyweight board, with property finance industry stalwart and former head of Nedbank CIB, Frank Berkeley, has its non-executive chairman. John and Jason McCormick are executive directors on the board, together with Duncan Church, while Greg Azzopardi, Peter Katzenellenbogen and Phatudi Maponya are non-executive directors.
* Developing story. More comment to come.