Liberty Holdings gears to list property assets as a REIT on JSE
Life insurer, Liberty Holdings Ltd (JSE:LBH), which co-owns the vibrant Sandton City with Pareto Limited, says it plans to list part of its property assets on the JSE as a Real Estate Investment Trust (REIT) by end of this year.
The listed REIT to be called Liberty Two Degrees, will have an anticipated net asset value of R10 billion and will be managed by Stanlib under the leadership of Amelia Beattie as the CEO.
The plans to list came shortly after the JSE entry of Globe Trade Centre SA (GTC), a Polish real estate developer in the CEE and SEE regions.
In this historic listing for the SA's property sector, Liberty is looking to raise up to R4 billion in new capital at listing.
The listing will also support expansion of and enhancements to the existing property assets, and broaden their accessibility to a wider investment community.
Thabo Dloti, Chief Executive of Liberty Holdings says, “The capital raise will enable the company to expand and enhance its existing portfolio in South Africa and sub-Saharan Africa, gain access to a far wider investor community, and significantly add to the dynamics of the listed property sector of the JSE."
Although Liberty Two Degrees will issue shares only to institutional investors on listing, Liberty has crafted an exclusive opportunity for its retail customers and financial advisers, by creating a new property portfolio – the Liberty Real Estate Portfolio – which will invest solely in shares of the listed Liberty Two Degrees.
Seelan Gobalsamy, CEO of Stanlib says “I am excited by the prospect of Liberty Two Degrees, we have combined our existing property investment strengths and capabilities to introduce a new opportunity that will benefit the Group’s customers as well as institutional investors into the REIT.”
The REIT’s assets will effectively comprise a portion of Liberty group’s property assets, which are primarily held for the benefit of Liberty’s policyholders, and the listing is therefore not expected to have a material impact on Liberty’s share price.
Liberty has appointed The Standard Bank of South Africa Limited and Java Capital as joint bookrunners and transaction advisers to the listing.
Listed property has for the last 20 years been a leading South African asset class performer, with average annual total returns of 19%. For the same period local equities delivered annual returns of 16%; local bonds 12%; and cash 9%.
Liberty recently reported basic earnings per share fell 10% to R6.67 for the six months to end-June from the matching period’s R7.41. However, it raised its interim dividend 9% to R2.76. The company grew its interim revenue 4% to R19.5bn. Its aftertax profit, however, fell 6.8% to R1.99bn.