Rand Merchant Holdings (RMH) has announced that it will be making a 25.01% investment into leading property development company, Atterbury. This acquisition will see Atterbury become RMH’s key development partner in its core portfolio, which will target the more traditional and larger areas of South African property (principally office, retail and industrial). To supplement this core portfolio, the RMH property business will also include a specialist portfolio that will focus on niche areas of the property sector.
RMH intend to create a property investment business by expanding their current investment in FirstRand and establishing a diversified portfolio of scalable entrepreneur-led businesses with proven track records in managing and building out property portfolios. The successful conclusion of the investment into Atterbury is subject to approval by competition authorities.
RMH’s property strategy seeks a balance between net asset value and yield, as well as a lower concentration risk because RMH will acquire stakes across multiple strategies, sub-sectors and geographies in time. The group will follow a phased approach to acquire its various property investments.
Commenting on the investment, RMH’s CEO Herman Bosman said:
“Our new property investment strategy meets our stated objective of creating shareholder value and also further diversifies RMH’s earnings base as we will invest across the breadth of the property value chain. The strategy will involve investing in physical property portfolios as well as vertically integrated property companies, specifically with internal management teams that offer asset management, development management and property management skills.”
RMH intend on working with Atterbury and other future investment partners to assist them with capital, strategic input, networking opportunities, structural longevity and additional governance systems.
Speaking on the investment into their company, Atterbury’s CEO Louis van der Watt added:
“Having developed more than two million square meters both inside and outside of South Africa, we are the ideal partner for RMH to capitalise on property opportunities.”
Recent Atterbury developments include 300,000sqm of commercial, retail and industrial properties on the Waterfall land in Gauteng, including the flagship 130,000sqm Mall of Africa as well as the formation of Attacq in 2005. Hyprop and Attacq acquired Ikeja City Mall in Lagos, Nigeria late last year from Actis, Paragon Holdings and other investors. Details from the transaction (including sales values and yields) are available in our sale reports.
RMH intends to fund its investment into Atterbury through preference share funding.