Marc Hasenfuss: Market Watch

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Marc Hasenfuss: Market Watch

Profitable pipeline

Investment giant HCI looks set to build aggressively on its property exposure – perhaps aided by some corporate action

My initial suspicions – aired some time ago in this magazine’s Fox section – that investment conglomerate Hosken Consolidated Investments (HCI) intends becoming a serious player in the property sector appear to be firming up.

In preparing for HCI’s AGM, I noticed the increased emphasis placed in the annual report on the company’s fledgling property interests. In truth, the property operations are hardly moving the needle at HCI. In the year to March, HCI Properties generated R81m in revenue and pretax profits of R70m – accounting, respectively, for 1% of group turnover and around 4% of group pretax profits.

But the growth in HCI’s property operations does catch the eye, remembering that in the 2013 financial year turnover was only R56m and pretax profits R33m. Admittedly, the significant portion of the property segment’s profit stemmed from the revaluation of the office block investment in Protea Place in Cape Town.

While HCI has for years tucked away its property interests held in Gallagher Estate (where development of vacant land is ongoing), the group’s real estate ambitions really caught fire about two years ago when…

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