Rebosis Property Fund gets nod for R5 billion acquisition
Rebosis Property Fund announced that its decision to acquire two regional retail centres as well as the acquisition of Billion Group (Pty) Limited manco, valued at R5bn has been approved by the majority of the firm's shareholders.
SA's listed property groups are struggling to find well priced acquisition opportunities and takeovers are becoming more difficult to achieve now as there are no easy targets.
Private developers have been hesitant to sell some of their properties, waiting for higher prices. This has seen many of the large listed funds turning their attention to assets abroad in Europe and Australia.
Also Read: Emira Property Fund turns down Arrowhead’s offer
A few underperforming real estate companies could also be the targets of other funds who feel they can manage the assets better.
Recently Emira Property Fund rejected Arrowhead Properties’ expression of interest to acquire all of its issued share capital on the basis that it has no benefit to its shareholders.
Rebosis, which listed five years ago with R3.6bn worth of assets, today said it would acquire two retail centres, Baywest Mall and Forest Hill City as well as the services companies from property developer Billion Group (Pty) Limited, giving it significant scale and liquidity.
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“We are very excited and also humbled by the overwhelming confidence our shareholders showed today,” commented Kameel Keshav, Chief Financial Officer of Rebosis.
Billion Group is owned by Rebosis founder and CEO, Sisa Ngebulana, and constituted a related party transaction in terms of the JSE’s Listings Requirements, requiring a 75% shareholder approval.
The acquisition boosts Rebosis retail exposure to 72% of the portfolio post the transaction, the company said in statement.
Stanlib’s head of listed property funds, Keillen Ndlovu said it had taken a while for Rebosis to close the deal.
“There were a lot of mixed views on the transaction and management worked very hard with back and forth meetings to make this happen. It's great to see that the deal has been finalized and we hope that this will lead to a more acceptable yield (lower yield and therefore higher share price) over time. Rebosis' yield has been generally much higher than the market,” said Ndlovu.
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The aggregate transaction amount is R4.934 billion, with up to approximately R3.7 billion funded by debt and the balance to be paid in cash, to be funded through a series of a claw-back offers which will be underwritten by Billion, Abacus (a 50% owner of Baywest Mall) and Nedbank.
Forest Hill City located in Centurion, Gauteng, opened on 29 May 2014. The A-grade regional shopping centre comprises approximately 72 811m² of retail shopping tenanted by large international brands and major national retailers, with parking for c.4 200 vehicles.
It is located along the N14 (Krugersdorp/Pretoria) highway and with access on the corner of the R55 and the N14 highway.
Baywest Mall located along the N2 highway, is an A-grade regional shopping centre offering 89 989m² in Port Elizabeth. It opened on 21 May 2015.