Vukile diversifies with stake in Atlantic Leaf
Vukile Property Fund, which owns rural and township shopping centres, a 50% stake in the East Rand Mall in Boksburg and a portfolio of government-tenanted offices, has acquired a 21% stake in UK-focused Atlantic Leaf for R350m.
© Dmitriy Shironosov – 123RF.com
The deal marks the company's first foray into offshore real estate and places Vukile in the ranks of a growing list of South African-based property stocks that have crossed SA's borders in search of new growth opportunities. These include sector heavyweight Growthpoint Properties, Redefine Properties, Emira Property Fund, Resilient Property Income Fund, Texton Property Fund and more recently Tower Property Fund.
Keillen Ndlovu, head of listed property funds at Stanlib, said yesterday that diversifying portfolios offshore had become a major theme among property stocks.
"Offshore exposure now makes up just over 25% of the income generated by the JSE's listed property sector versus 0% 10 years ago. We expect this to increase to more than 30% in the next six to 12 months."
AltX-listed Atlantic Leaf, the brainchild of Cape-based founder of Leaf Capital Paul Leaf-Wright, owns 40 properties throughout the UK valued at about £130m. The firm, which is also targeting Germany, aims to grow its portfolio to at least £500m within the next three years.
Vukile plans to bump up its stake in Atlantic Leaf to 30% over time.
Vukile CEO Laurence Rapp said yesterday the investment in Atlantic Leaf was the first step in Vukile's strategy to explore assets in new territories and subsectors. "The strategic relationship with Atlantic Leaf allows Vukile to take advantage of opportunities with attractive yields in new markets, with a fund that is on a growth trajectory."
The company was pleased to be making its move in the global arena with such a "topclass and highly regarded" management team, he said. "Atlantic Leaf has used its experience, credibility and deal-making ability in the South African market to create a beachhead for real estate investment in the UK and Europe."
Vukile's assets have grown threefold during Mr Rapp's four-year tenure as CEO - from R5.3bn in August 2011 to about R15bn currently. Earlier this year, Vukile finalised its muchanticipated 65% acquisition of retail-focused Synergy Income Fund as well as Synergy's management firm.
Vukile was trading at R18.30 Thursday afternoon, about 5% up on its lows of R17.50 early last month.
Source: Business Day
Source: I-Net Bridge
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