Metope In The News

Watch Metope Investment Managers CEO Liliane Barnard’s presentation from the Moneyweb Boutique Asset Manager conference in July 2017

The SA listed real estate sector is increasingly becoming globalised as local property companies invest in direct property offshore and international property companies opt for dual listings on the Johannesburg Securities Exchange (JSE). For SA investors looking for exposure to property outside of the country, the JSE is a good place to start. Liliane Barnard, CEO of Metope Investment Managers, elaborates.

The SA listed real estate sector is increasingly becoming globalised as local property companies invest in direct property offshore and international property companies opt for dual listings on the Johannesburg Securities Exchange (JSE). For SA investors looking for exposure to property outside of the country, the JSE is a good place to start. Liliane Barnard, CEO of Metope Investment Managers, comments

The market is clearly impressed by Spear Reit’s growth story, judging by the significantly oversubscribed capital raise concluded by the company last week. Management, led by CEO Mike Flax, received bids for R528m, nearly double the R280m the company had hoped to raise. That’s no easy feat, given fund managers’ renewed preference for offshore property stocks. The trend is underscored by the fact that most of the R11bn (Stanlib figures) raised by the listed property sector in the year to date through rights offers and private placements has gone to offshore counters.

Attacq plans to convert into a real estate investment trust (Reit) after operating for three-and-a-half years as a capital growth company and not declaring dividends to shareholders. Attacq, which is responsible for the Waterfall City development located between Midrand and Pretoria, annouced that it would convert into a Reit by July 2018. The conversion paves the way for the company to start distributing regular dividends to shareholders. Reits are compelled to distribute more than 65% of their rental income as dividends to shareholders.

South African investors are still chasing yield, judging by the hefty R11bn in fresh capital raised by the listed property sector year to date through rights offers and private placements. Most of the money invested in the sector has gone to offshore property counters.  

Delta Property Fund, which focuses on renting offices to the state, plans to grow significantly in 2017 as it looks to broaden its investor base. The largely black-owned company is planning to raise as much as R5bn worth of capital through a shares issue to a new empowerment consortium, nearly doubling its market capitalisation, which sits at R6bn.

The listed property sector has had a tumultuous year, making it increasingly difficult to forecast returns as the share prices of many counters continue to see-saw. However, one counter that is proving surprisingly resilient is Equites Property Fund, the JSE’s only specialist industrial play.

Industrial real-estate focused Equites Property Fund has outperformed expectations since listing about two-and-a-half years ago, growing its portfolio from 17 properties worth R1bn to 52 valued at R6.2bn at the end of February. Andrea Taverna-Turisan, the group’s CEO, said its industrial focus and expertise had stood it in good stead.

It has been a slow start for Poland-focused property company Echo Polska Properties (EPP) in articulating its corporate strategy to income-chasing investors since its JSE listing seven months ago. Underscoring this is its share price performance, which has fallen (along with other offshore counters in SA’s real estate sector) by 21% since September last year. But the company, with a market capitalisation of R10.7 billion, plans to reposition its property investments towards Poland’s retail market to turn its fortunes around.