The local property sector is certainly making hay while the sun shines.
Not content to just bask in the glow of lower interest rates, last week two of the smaller property counters managed, in the twinkling of an eye, to raise a not insubstantial R1.9bn through respective bookbuilding exercises that attracted strong investor demand.
Western Cape-focused Spear Reit launched its bookbuild for R1bn at the close of business on April 22 and had raised that funding by 8.45am the next day. Spear said the exercise was “multiple times oversubscribed”. Retail property specialist Fairvest took just a few hours last Friday to raise R900m in a bookbuild. The group initially aimed to reach R500m, but strong demand allowed for the raising of substantially more.
Spear mainly wants to tap a pipeline of convenience retail as well as commercial and industrial acquisition opportunities. Fairvest, on the other hand, wants to partially settle the purchase price for the Muller Group acquisition, make ongoing investments in Onepath Investments and chip away at debt.
With this kind of investor appetite, no doubt a few more real estate counters might start looking at the market for fresh funding.
Meanwhile, self-storage real estate investment trust Stor-Age delivered on a small part of its bookbuild initiative. The group quickly raised R500m in December last year in a bookbuild that was three times oversubscribed.
Last week Stor-Age announced the acquisition of Execustore in Ballito for R59m. There should be more acquisitions to come, given that Stor-Age reiterated at the time of its bookbuild that its expansion strategy in South Africa targets 90 properties by 2030. In the UK, it wants to scale up its Storage King operation to 70 properties.
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