Afine Investments, which holds a portfolio of income-generating immovable properties focused on the petroleum sector in South Africa, plans to list as a real estate investment trust (Reit) on the JSE on December 9.
The company was founded by Peter Todd, with strategic input from Mike Watters – both of whom are notable investors and operators in the Reit sector – with the purpose of creating a holding company for a Reit focussing on the petroleum sector in South Africa.
Watters is Afine chairperson.
Afine operates as a specialist Reit in the petrol service station sector in South Africa, being created as a team effort with the key management of Petroland Group, which was established in 1993 by Anton Loubser, who has subsequently been appointed Afine CEO owing to his vast experience.
Since its establishment, Petroland has developed more than 60 new petrol service stations in the majority of South Africa’s metropolitan areas, as well as in rural areas such as Phuthaditjhaba, Kanyamazane and Lebowakgomo.
In South Africa, petrol service station properties are generally controlled by oil companies and a small group of petrol service station property owners.
However, in a statement, Afine states that high property prices, complex legal structures, environmental legislation and licensing requirements create high barriers of entry for the ordinary person to participate in a petrol service station property as an investment opportunity.
As such, Afine claims to be created with the main objective of affording ordinary property investors the opportunity to participate in the ownership of petrol service station properties.
Although this type of Reit is already in operation on other stock exchanges globally, this will be the first of its kind in South Africa, says Afine.
AcaciaCap MD Michelle Krastanov, who acted as the designated adviser on the Afine JSE listing, explains that the company has secured long-term leases with oil majors, which provide reliable and sustainable revenue, and has also entered into an agreement with Petroland.
She says Petroland will provide strategic management services, while Afine has negotiated a right of first refusal on all new Petroland development projects.
Krastanov says Petroland has a significant client base in the commercial property industry, from which a large number of new petrol service station opportunities are generated, including the Engen Platinum One Stop – one of the “most successful petrol service stations in Southern Africa”, which was completed in 2012/13.