Shareholders of JSE-listed real estate investment trusts Gemgrow Properties and Arrowhead Properties on Thursday approved the reverse takeover of Gemgrow by Arrowhead.
This will result in the creation of a R16-billion South Africa-focused property fund.
The reverse takeover of Gemgrow by Arrowhead, which previously held 53.3% of Gemgrow’s shares, will create a larger, and more well balanced property portfolio of 212 properties, diversified across the three primary asset classes with a gross leasable area of 1.3-million square meters, spread across the country.
“The larger group, which will be listed under the Arrowhead Properties name with JSE ticker code AHA and AHB for the A shares and B shares, respectively, will be better placed to weather current tough market conditions,” the companies said in a statement.
Other advantages of the merger include creating a simpler, more efficient structure which improves liquidity for Gemgrow shareholders and will position the company better to access equity markets.
The merged entity has 41% of its income base in Gauteng, 10% in KwaZulu-Natal, 13% in the Western Cape and 16% in Limpopo, with 46% of income from retail, 36% from office and 18% from industrial properties.
The new entity’s shares will start trading on September 16, and it will be headed up by Arrowhead CEO Mark Kaplan.