12 August 2011
The JSE has gained a new property fund with the successful listing of Vunani Property Investment Fund (VPIF), previously a private joint venture between black economic empowerment group Vunani Capital and property company Hyprop.
The fund listed in the “Real Estate – Real Estate Holdings and Development” sector on the main board of the exchange under the share code “VPF”, with an initial market capitalisation of R850-million.
“The JSE is pleased to welcome Vunani Property Investment Fund to its Main Board,” JSE chief executive Russell Loubser said this week. “The listing reflects further opportunities presented to investors looking to gain exposure to the real estate holdings and development sector.”
Focus on continued growth
VPIF was formed in 2006 when Vunani (50.2%) and Hyprop (49.8%) pooled two portfolios of commercial properties into a property fund with the intention of growing the fund.
“We are proud to be making our debut on the JSE . and welcome all new shareholders,” VPIF chief executive Rob Kane said in a statement this week. “The take-up exceeded our expectations and enables us to list the fund with almost zero debt.”
The fund will be managed by Vunani Property Asset Management, a 60% black-controlled fund, while JHI are the outsourced property managers.
“We can immediately start to selectively assess various value-enhancing opportunities,” said Kane. “Our focus post listing will be to continue growing the portfolio, whilst maintaining the quality of the properties and delivering superior shareholder returns.”
Office dominated property portfolio
VPIF represents the only office-dominated property portfolio listed on the JSE. The portfolio currently comprises 21 buildings with an aggregate value of R947.6-million.
These properties are mainly in Gauteng and the Western Cape and are predominantly leased by national clients, including Standard Bank of South Africa, Vodacom and the government.
Vacancies are low at 4.8%, which includes planned vacancies of 2% due to yield enhancing refurbishments under way.
Divesting from non-core assets
In line with Hyprop’s strategy to divest from non-core assets, it has, pursuant to the listing, reduced its existing interest in VPIF. Taking into account new institutional investment in VPIF on listing, Hyprop’s interest in the fund now stands at 11.5%.
Going forward Hyprop intends exiting its remaining investment in VPIF entirely.
“The investment in VPIF has served as a successful realisation of Hyprop’s enterprise development strategy, particularly in light of today’s listing,” said Hyprop. “We look forward to VPIF’s continued future growth and success.”
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