Investment holding company RMH today announced that will expand its current, single investment in FirstRand to create a property investment business. As a first step in the strategy of establishing a diversified portfolio of scalable entrepreneur-led businesses with proven track records in managing and building out property portfolios, the group announced its intention to make a 25.01% investment in leading South African property group, Atterbury (only condition precedent remaining is Competition Commission approval).
Atterbury will become RMH’s key development partner in its core portfolio that will target the more traditional and larger areas of South African property (principally office, retail and industrial property). To supplement this core portfolio, the RMH property business will also include a specialist portfolio which will focus on niche areas of the property sector. The RMH property strategy will focus on owner-managed businesses, a broader value chain in property, an unlisted portfolio, a balance between net asset value and yield, as well as a lower concentration risk as 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.
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. In line with our history and ethos, we will focus on entrepreneurial and owner-managed businesses. 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. As a first step in the realisation of our strategy, we have found an excellent partner in Atterbury. They have a 22-year successful track record in entrepreneurial skills, as well as development and asset management ability. Their team is regarded as the most innovative player in the South African property market. We will work with Atterbury and other future investment partners to assist them with capital, strategic input, networking opportunities, structural longevity and additional governance systems.”
Atterbury’s CEO Louis van der Watt added: “It was evident from the first meeting that Atterbury and RMH share a similar culture and value set. Atterbury, as a relatively small company, is honoured to be reckoned amongst the RMH stable’s other prestigious investments. 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 key developments include 300 000 square meters of commercial, retail and industrial properties on the Waterfall land in Gauteng, including the flagship 130 000 square meters Mall of Africa that opened last week. Although Atterbury is an unlisted entity, it has also played a significant role in two major transactions in the listed property sector. Atterbury was involved in the establishment of Attfund that was reversed into Hyprop in 2011. The Attfund assets remain an important part of Hyprop’s current portfolio. Atterbury formed Attacq in 2005 and played an instrumental role in the successful listing of Attacq in 2013.
The financial effects of this transaction will be immaterial on the financial results of RMH over the short to medium term. RMH intends to fund its investment into Atterbury through preference share funding. The successful conclusion of the investment into Atterbury is subject to approval by competition authorities.