JSE-listed Vunani Property Investment Fund (VPIF) has announced that Vunani Property Asset Management (VPAM) would sell its business, including the cession and assignment of the asset management agreement between VPIF and VPAM and its employment contracts, to Texton Property Investments for R117-million in cash.

VPAM is a wholly owned subsidiary of Vunani Properties, which, in turn, is a 78%-owned subsidiary of Vunani, which established VPIF in 2006.

“This is an enormously important deal for VPIF which will create a springboard for the fund to become a mid-sized [or] potentially a larger fund. The incoming shareholders are competent both in directly held properties and in the listed property sector, are well-known and respected in property circles and, most importantly, will add considerable property knowledge and expertise to the VPIF board,” VPIF CEO Rob Kane said.

Texton decided on the investment, as it believed that VPIF could become a meaningful player in the listed property sector, and was well placed to achieve this owing to its existing portfolio, experience, network and deal-making record.

Further, in line with the new Department of Trade and Industry black economic-empowerment (BEE) codes and the Property Charter, Texton would put a broad-based BEE scheme in place at VPIF level.

“The sale of the assets from Vunani to Texton is an example of successful empowerment in the property sector. This is a transaction that will result in significant wealth creation for Vunani and its investors,” Texton director Angelique de Rauville said.

She added that Texton was fully committed to the implementation of a tangible empowerment structure as soon as is reasonably possible – working towards an April 2014 deadline.

“The structure under consideration will provide meaningful BEE participation at the VPIF level, provide broad-based empowerment, which management feels particularly strongly about, and, in addition, result in little, if no dilution, to existing unitholders,” De Rauville said.

Kane stated that this was a new era for the fund.

“Looking ahead, we are well positioned in respect of the much anticipated impending corporate activity in the sector which should lead to enhanced deal flow. The new shareholders are committed to bringing solid deal flow to the fund. There will, however, be no change to the strategy of the business and we intend remaining an office-dominated fund,” he said.

Kane would remain CEO of VPIF, while current VPIF CFO Marelise de Lange would remain in her position.

The transaction remained subject to various conditions precedent, including approval by the VPIF board and unitholders.