Fewer listed property companies listed in 2016 compared to 2015 due to sector’s consolidation

By Thabang Mokopanele

In 2015 there were seven new property listings on the JSE, including Indluplace Properties, New Frontier Properties, Lodestone Properties, International Hotel, Capital & Regional, Balwin  Properties and Schroder Real Estate. In 2016, there were just four, including Liberty Two Degrees, Greenbay Properties, Echo Polska Property and Hammerson, and there are currently more on the radar for 2017.

More mergers and acquisitions

The listed property sector appears to be in a consolidation phase, with several mergers and acquisitions having taken place in the past year – and more on the cards. The recent corporate actions include the Redefine acquisition of Pivotal, the Fortress Income Fund acquisition of Lodestone REIT, the Rebosis  acquisition of Billion Group and the formation of GemGrow Properties as a result of a tri-partite agreement between Vukile Property Fund, Synergy and Arrowhead Properties.

Next on the list is the merger of New Europe Property Investments (Nepi) and Rockcastle Global Real Estate, to create a single REIT worth some R84bn. Meanwhile, Hospitality Property Fund is currently in talks with hotel group Tsogo Sun to buy more of its hotel assets for about R3,3bn.

More offshore investments

Several of South Africa’s REITs already have exposure to markets in the UK, Australia and both

Western and Eastern Europe, and they continue to seek new offshore opportunities. In 2016 Redefine Properties partnered with Echo Investment in Poland and Growthpoint Properties partnered with Globalworth Real Estate Investment in Romania, while Resilient and Fortress added Greenbay to a whole array of offshore interests. Hyprop has also entered Eastern Europe recently by buying three shopping centres in Serbia, Montenegro and Macedonia, while Tower Property Fund has assets in Croatia, and Accelerate Property Fund has investments in Slovakia as well as Austria. Meanwhile, both Equites and Texton recently acquired more properties in the UK.