SA Corporate shares rally after R439m Joburg CBD Investment

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Shares of JSE-listed SA Corporate Real Estate Fund surged 2,6% to close at 393c on Monday after reports that the group had acquired a significant investment in the Johannesburg CBD from Afhco Group. FILE PHOTO: Rory Mackey, MD Shares of JSE-listed SA Corporate Real Estate Fund surged 2,6% to close at 393c on Monday after reports that the group had acquired a significant investment in the Johannesburg CBD from Afhco Group. FILE PHOTO: Rory Mackey, MD

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Shares of JSE-listed SA Corporate Real Estate Fund surged 2,6% to close at 393c on Monday after reports that the group had acquired a significant investment in the Johannesburg CBD from Afhco Group.

The fund acquired the property portfolio of the Afhco Group from Old Mutual’s IDEAS Managed Fund, as well as Wayne and Renney Plit, for a puchase consideration of R439 million.

SA Corporate says in a SENS statement that Afhco was founded in 1996 by Wayne Plit and is currently one of the leading developers in the Johannesburg CBD.

Its portfolio consists of over 5,000 residential apartments, and the group continues to develop new precincts and communities around its buildings.

Afhco's initial strategy was to partner with property owners in distressed areas to refurbish existing residential buildings, increase the number of units in a sectional title format and finally sell units to tenants or prospective buyers. In 2000, Afhco acquired Castle Mansions, South African Breweries' previous offices for a consideration of R800,000.

Previously, urban developers had merely retrofitted and condensed existing residential space. This was the first office to residential conversion of this scale in South Africa and resulted in the construction of 142 residential apartments. This was the turning point in Afhco's strategy, casting a much wider net over possible residential conversion opportunities.              

In 2001, Wayne's brother, Renney Plit joined the business and in 2006, OMLACSA purchased 50% of the equity of Afhco and provided a capital injection into the Afhco business, which has served as a major catalyst in Afhco's growth and development track record to date.

SA Corporate says in the statement that the Afhco platform is arguably the most attractive JHB Inner City CBD residential portfolio offering scale, quality and diversity.

The purchase consideration for the Afhco shares is R439 million. It is based on a portfolio value of R1.5 billion and debt of R1.037 billion.

READ MORE ON:

Johannesburg Property Market  |  Listed Property / REITs  |  SA Corporate Real Estate Fund  |  Affordable Housing Company (Afhco)  |  Renney Plit  |  Wayne Plit

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