PROPERTY: Cape Town Property Fund Gets JSE Green Light
Recent Western Cape Business News
Plans to list South Africa’s first dedicated convenience-retail property fund on the JSE Securities Exchange are on track for mid-December following the bourse’s approval. The Cape Town-based R1.1 billion Synergy Income Fund will break new ground in the sector as it creates a specialised retail property fund with a portfolio made up entirely of convenience retail assets, typically in the 10 000-25 000m2 range and mostly located in the high-growth lower-LSM end of the market. Synergy is further differentiated from other counters in the sector by virtue of its relationship with the SPAR Group, one of the world’s best-known retail brands and a leading convenience retailer in South Africa.
‘We believe that specialisation will be a key driver of investment performance in the future. By operating in association with the SPAR Group we can offer investors a sustainable competitive advantage and attractive growth prospects,’ says William Brooks, chief executive officer of Synergy Income Fund. ‘It’s about really understanding the investment opportunities, allocating capital correctly and managing the assets effectively to extract maximum value for investors.The bulk of properties will have a SuperSPAR as the anchor tenant, be complemented by a range of national tenants and, where appropriate, independent retailers offering relevance and value to the local shopping community.’
Capital Land, founded by Cape Town-based asset management team of William Brooks and Uys Meyer, established Synergy Income Fund through its association with the SPAR Group. This relationship will enable Synergy to leverage its growth through access to the SPAR Group’s research capabilities and development opportunities. SPAR Group added 25 new stores during the financial year ending September 2011, bringing the total to 859 across the country, and has a significant share of the South African retail food market.
Significant investors in Synergy Income Fund will include Liberty Group Limited (represented by Liberty Properties), one of the largest property investors in South Africa; Regarding Capital Management, a privately owned asset management company with a portfolio exceeding R18 billion; and BlueAlpha Investment Management.
Mel Urdang, Director: Retail and Business Development for Liberty properties, notes that Liberty Group’s holding in Synergy Income Fund will assist the Liberty Balanced Property Portfolio in achieving one of its strategic goals, which is diversification. This will be achieved through an improved geographical spread and tenant profile. Says Urdang: ‘Synergy offers excellent exposure via a pooled investment vehicle to the high-growth, lower-LSM shopper segment. We have every confidence that this investment will contribute to our 25-year track record of delivering inflation-beating returns.’
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