Europe beckons as Texton moves beyond office niche

Texton Property Fund plans to dramatically increase its offshore property exposure as it diversifies away from being a pure office play.

The group has plans to raise its overseas weighting to 50% of its property portfolio from 25% in the next year or so, CEO Angelique de Rauville has said.

Texton was formed in 2006 and listed in August 2011 as Vunani Property Investment Fund. Its name was changed to Texton following corporate action and an investment consortium led by Ms de Rauville took over the fund last year.

Since joining Texton, she has shifted its focus from niche properties situated mostly in the Western Cape to a larger diversified portfolio of assets.

Texton grew its distributions 10.9% in the year to June, the fund announced last week.

It posted a 94.77c distribution per share compared with 85.47c in the comparative 2014 financial year.

Ms de Rauville said on Friday Texton was looking at buying industrial and retail properties in SA that were geared to provide more value than offices.

Abroad, the team would continue to pursue retail centres in the UK but was also looking at continental Europe.

“We are very opportunistic. We like that we do deals quickly given our team on the ground in the UK. We acknowledge that other South African funds are looking too but we believe our strategy works,” she said.

“Much progress was made in diversifying our property portfolio away from mainly the secondary office sector and also into the UK. We acquired 23 properties in the year, five of them in England and Wales, and we have established a new collaboration with Tradehold,” she said.

The 23 investments were valued at R1.766bn, and the fund’s assets worth at about R4.6bn.

Ms de Rauville said 2015 was a year of change for the fund, “most of which was considered to be positive and favourable regarding the longer-term prospects of the company”.

Old Mutual Investment Group portfolio manager Evan Robins said Texton’s transition to a fund that had significant UK retail exposure was ambitious but that its future expansion plans required more clarity.