Redefine Properties has bought an 11% “strategic” stake in Emira Property Fund, and plans to increase its holding in a company it sees as a potential takeover target.
Redefine is the JSE’s third-largest real estate investment trust (Reit) with a market value of R33bn, and Emira is the 12th-largest with a market value of R8bn.
Redefine chairman Marc Wainer said yesterday that the purchase of the participatory units, worth about R880m, was strategic. “It could become a takeover target in the future so what we have here is a strategic stake. We would have liked more than 11% but it’s a start.”
Emira Property Fund’s diversified portfolio of 141 properties is valued at R10.8bn. Emira is also internationally diversified through its direct interest in Australia Stock Exchange-listed Growthpoint Properties Australia, valued at R666m as at June 30, with total assets of R11.6bn.
Emira CEO James Templeton said the fund had been turned around over the past three years.
Wainer said he was also impressed with Emira’s focus moving to retail properties. “I think they are a bit overweight offices but it is clear they are interested in attractive shopping mall assets.”
Redefine has also increased its recently announced R1bn equity raising to R1.36bn in light of strong demand. The capital raising took place through an accelerated bookbuild that opened yesterday. Redefine placed about 148.4-million shares at R9.50 per share.
CEO Andrew Konig said the response to the capital raising showed confidence in Redefine’s recent asset acquisitions.
“We are very pleased with the level of support received from our shareholders, which is reflective of the market’s confidence in Redefine. The proceeds of the placement will be used to fund part of the R2.7bn Macsteel acquisition. We have sufficient gearing capacity to fund the remainder.”
In August Redefine agreed to buy 28 industrial properties from steel supplier Macsteel with a 12-year triple net lease. “The Macsteel transaction will transform Redefine’s industrial portfolio and is in line with our strategy to grow and diversify our portfolio,”Konig said.