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Today Investec Australia Property Fund (JSE: IAP) listed on the JSE’s Main Board. The fund is one of three property stocks seeking a JSE listing this month and one of two which are focused off-shore.
Investec Australia Property Fund is a real estate investment trust An entity that pools the resources of its shareholders and invests the proceeds in stocks, real estate, or other investments with the aim of increasing the equity of the shareholders. (REIT) with a property portfolio which consists of a mix of industrial and commercial assets across Australia. The fund’s portfolio is valued at AU$129.9m (R1.2bn). The fund’s private placing closed on 10 October and was significantly oversubscribed, with more than 128 million shares at AUD 1.00 placed. This is the second property fund to list under the REIT structure on the JSE.
"The Investec Australia Property Fund is a unique investmentThe purchase or exchange of any asset or right to an asset by an investor with the aim of making a profit. For example, an investor ‘purchases’ a fixed deposit at a bank with the intent of earning interest thereon and so making a profit. opportunity, offering South African investors direct exposureThe degree to which an investor is geared financially. An investor with a relatively high exposure to debt will carry a higher risk profile and might not obtain finance easily. to the Australian property market and currency. The objective of the fund is to invest in high quality, sustainable and well diversified real estate in Australia. At the outset, the fund is a solid, sustainable platform that is well positioned for growth,” says Sam Leon, Non-Executive Director of the Investec Property Fund. As the fund will be inwardly listed, South African investors will be able to access it without affecting their foreign investment allowances.
“We’re pleased to welcome the Investec Australia Property Fund on to the JSE’s Main Board. This listing gives South African investors the opportunity to further diversify through off-shore property exposure,” says Zeona Jacobs, Director of Issuer and Investor Relations at the JSE. This is the second Investec property listing on the JSE with the Investec Property Fund coming to the market in April 2011.
A regulatory change effective on 1 May 2013 saw South Africa adopt the globally understood REIT structure and positions the exchange as a capital raising venue for international property funds. More than 25 countries make use of the REIT model including the United States, United Kingdom, Australia, France and Belgium. Since this this change 26 property funds have converted to REIT status while two funds have listed using the REIT structure.
South Africa is ranked second in the world for raising capital through the local equity market according to the recently released World Economic Forum’s Global Competiveness Report for 2013-2014. In the latest report, the country moved up one place from last year’s ranking.
