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Tower sets its sights in R300 million for placement

BUSINESS DAY: July 15 – Nick Hedley

Tower Property Fund, which will officially list on the JSE on Friday, said last week its private placement was fully committed of underwritten.

The fund said that based on its engagements with those investors providing pre-commitments and an underwrite, the board considered R300m “to be the optimal amount of capital to be raised” in its private placement.

Tower, which has an experienced management team in the listed property space, aims to differentiate itself with a focus on “greening” its properties over time to save costs and make its buildings more competitive.

At listing, if certain acquisitions are implemented, the fund’s property portfolio will consist of 27 properties valued at R1.65bn. The portfolio includes mixed-use Cape Quarter complex in Green Point, Cape Town, as well as a five star, green star-rated office complex in Grayston Drive, Sandton.

Tower is being launched by Spire Property Group and partners, and has an experienced management team with a successful track record. Spire successfully listed Paramount Property Fund, which grew to R3.5bn when it was sold to Growthpoint Properties in 2006.

The management team includes Spire’s Marc Edwards, Bruce Kerswill and Keit Craddock, as well as partners Johan Malherbe and Bruce Rogerson, who are former founding members of Mettle Property Group.

Tower said on Friday it had received binding subscription undertakings totalling R178m, equating to 20.4-million shares at R8.70 per share.

Stanlib Asset Management committed R73m, while Grindrod Asset Management and Prescient INvestment Management had each committed R50m. 3PM Investment had committed R5m. JSE-listed Fortress Income Fund had committed to an underwrite of up to R150m.

Tower’s acquisition portfolio includes five properties that are being acquired from Fortress.

Stanlib head of listed property funds Kellen Ndlovu said that Tower was an attractive investment for Stanlib partly because of its management team.

In addition, he sais, “we believe that pricing – a yield of 9.5% including the underwriting fee – is reasonable for the portfolio and is relatively attractive compared to similar smaller cap property companies, who are trading at around 8.5% yields.

Mr Ndlovu said Tower was tradding “quite higher than the sector average yield of 7.1%.

 

 

Nick Hedly

Moneyweb interview with Marc Edwards

HILTON TARRANT: The JSE’s newest listing will make its debut next Friday. Tower Property Fund will list under the new REIT structure and is being launched by Spire Property Group. Mark Edwards is chief executive of Tower. Mark, the million-dollar question – why list and why now?

Listen to the interview here and now…. Interview with Moneyweb

The first new property listing under the REIT structure

WITH a JSE listing planned for July, Tower Property Fund intends to be the first new property listing under the JSE’s recently launched real estate investment trust (Reit) structure.

The fund’s debut on the JSE would see it joining 12 other property listings since 2011 — and more are expected to follow. Although other listed groups have converted to the new Reit structure, Tower would be the first new fund to list as a Reit.

At listing, the fund’s property portfolio will consist of 27 properties valued at R1.65bn. The portfolio includes the mixed-use Cape Quarter complex in Green Point, Cape Town, as well as a five-star green star-rated office complex in Grayston Drive, Sandton balklänningar .

Tower is being launched by Spire Property Group and partners, and has an experienced management team with a successful track record — Spire successfully listed Paramount Property Fund, which grew to R3.5bn when it was sold to Growthpoint Properties in 2006.

Its management has announced a strong focus on basic “greening initiatives” and other energy-saving measures to reduce occupancy costs.

Click here for the rest of this article on Business Day Live…

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JSE’s 10 new property listings

In the month to June 18, the index shed 12%, more than R20bn was wiped off the sector’s market cap and forward yields climbed from an average 6,1% to around 7%.

The repricing of the listed property sector will make it less attractive for unlisted real estate companies and developers to bring their shopping centres, offices and warehouses to the JSE. Proposed listings may well have to adjust their initial yield offering upwards to lure enough investor support.

But that has not derailed the listing plans of, among others, Tower Property Fund, which is to make its JSE debut in July. The fund, which counts the trendy, mixed-use precinct Cape Quarter in Cape Town’s Green Point and a Green Star-rated Sandton office block as two of its flagship properties, has been assembled by the Cape-based Spire Property Group.

Tower’s listing is likely to be followed in mid-September by Sovereign Properties, a government-tenanted office portfolio that has been unbundled by Redefine Properties. Then come Nic Georgiou’s Accelerate Property Fund and Atterbury Investment Holdings, this year’s biggest and most anticipated listing, probably in the fourth quarter. Several others are expected to follow.

Link to the rest of this article….

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