.jpg)
Today Tower Property Fund (JSE: TWR) became the first property fund to list on the JSE under the Real Estate Investment Trust (REIT) structure.
The JSE’s listed property sector has seen 16 companies come to the market in the past three years including international fund GoGlobal, which listed this past May. Although other funds have converted to the new REIT structure, Tower Property Fund would be the first new fund to list as a REIT. Launched by Spire Property Group, Tower Property Fund’s property portfolio consists of 27 properties valued at R1.65bn.
“The executives of Tower Property Fund are very excited to list on the JSE’s Main Board. We offer investors a sustainable, growing source of income and aim to differentiate the fund from its peers through an active strategy of ‘greening’ properties over time. This focus will initially be on reducing energy costs and will make our buildings more competitive. We believe that green initiatives such as Green Building Council accreditation will become increasingly more important to the marketplace,” says Marc Edwards CEO of the Tower Property Fund. Spire Property Group successfully listed Paramount Property Fund, which grew to R3.5bn when it was sold to Growthpoint Properties in 2006.
“We are very pleased to welcome another established property player, Tower Property Fund, on to the JSE. This is a sector that has enjoyed tremendous growth in the past ten years and is one that South African investors understand well,” says Zeona Jacobs, Director of Issuer and Investor Relations at the JSE.
The sector has grown from R61 billion at the end of first half of 2003 to R328 billion at end of June 2013. The JSE now boasts 45 listed property companies accounting for 3,8% of overall JSE market capitalisation. A regulatory change in April 2013 which saw South Africa adopt the globally understood Real Estate Investment Trust (REIT) structure further positions the exchange as a venue for property listings. More than 25 countries make use of the REIT model including the United States, United Kingdom, Australia, France, Belgium, Hong Kong and Singapore.
South Africa is currently ranked 3rd in the world for raising capital through the local equity market according to the latest World Economic Forum’s Global Competiveness Report.
