Nedbank Corporate Property Finance has extended its property portfolio base with a R150-million investment in property investment development fund Pivotal Property Fund.

The investment saw Nedbank acquire 12 000 ordinary shares, which, the bank said on Wednesday, gave it a 15% shareholding in the fund.

The shares were part of a new issue by Pivotal aimed at raising funds to acquire a 40% undivided share in Cradlestone Mall, the new 76 000 m² regional shopping centre in Mogale City, north-west of Johannesburg, that opened on November 20.

According to Nedbank Corporate Property Finance regional executive in Gauteng Ken Reynolds, the R150-million investment formed part of the bank’s commitment to support and participate in the growth of South Africa’s promising listed property sector.

“Despite a relatively muted 2013 for most of South Africa’s property sectors, property funds have generally continued to go from strength to strength, and Pivotal is no exception, with its enviable property portfolio making it a highly appealing investment opportunity,” Reynolds explained.

Reynolds also said the reasoning behind the additional shares being made available by Pivotal was a key motive for Nedbank chosing to invest in the fund. “The fact that Pivotal used the money it raised from the share issue to acquire Cradlestone Mall, demonstrates that it shares Nedbank Corporate Property Finance’s optimism about and commitment to the South African property sector as a whole, and any such efforts to expand its already excellent commercial and retail property portfolio should build Pivotal’s capacity to continue to increase the returns it has, thus far, provided its investors, well into the future,” he said.

Reynolds noted that the fund’s recent decision to include dividend distributions along with its historic capital growth value proposition to clients was further evidence of the excellent growth and steady evolution of this “increasingly important” role-player on the South African property fund landscape.

“Pivotal’s stated intention to steadily increase its property portfolio through direct acquisitions combined with direct participation in greenfield developments means the fund affords Nedbank a unique opportunity to further extend its established competitive advantage, which we will, in turn, leverage to the advantage of our current and future clients.”

In addition to its diversified portfolio and quality underlying assets, he highlighted that Pivotal boasted a reputable executive management team, a strong asset pipeline and a well diversified portfolio, all of which was “perfectly rounded off as a compelling investment opportunity by the fund’s stated intention to list as a [real estate investment trust] within the next five years”.