JSE-listed real estate investment trust (Reit) Liberty Two Degrees (L2D) will acquire additional undivided shares in properties co-owned by financial services company Liberty Holdings (Liberty) to the value of R2.51-billion, boosting L2D’s share in the Liberty property portfolio from 22% to 31%.
This is in accordance with a put option available to Liberty, following a relationship agreement established between the two companies in November 2016, ahead of L2D’s listing on the Johannesburg Stock Exchange in December.
The relationship agreement stipulated that Liberty would list a portion of its property portfolio through the then newly established Reit, L2D, which is spearheaded by CEO Amelia Beattie.
In terms of the put option granted to Liberty under the agreement, the financial services provider has the option to sell additional portions of its undivided shares in its properties to L2D from time to time. This is in addition to L2D’s initial 22% share in Liberty’s property portfolio, valued at about R6-billion.
When Liberty exercises the put option, L2D can choose whether or not to pay cash or issue units to Liberty in consideration thereof.
L2D believes in the “resilient nature and quality” of the properties it already owns, and that an additional stake in Liberty’s portfolio “supplements” L2D’s existing position, supporting its fund prospects.
The Reit has elected to settle the consideration, payable in cash, on or before August 8, in order to deploy the majority of its cash resources.
L2D co-owns predominantly retail real estate assets in South Africa. In Johannesburg, its interests include the Sandton City complex, the Eastgate complex and Nelson Mandela Square.
Its other retail assets, among others, are regional shopping centres Liberty Midlands Mall, in KwaZulu-Natal, and Liberty Promenade, in Mitchells Plain, in the Western Cape. L2D also has shares in mixed-use precinct Melrose Arch, in Johannesburg, and the newly developed Botshabelo Mall, in the Free State.
In addition to the offices included in the main retail complexes, Liberty Two Degrees co-owns select office properties located in key business nodes with blue-chip anchor tenants. These properties include the Standard Bank Centre, in Johannesburg, the Liberty Centre in Century City Office Park, in Cape Town, and Liberty Centre, in Umhlanga Ridge, Durban.