Investec fund reduces SA exposure

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Investec fund reduces SA exposure

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Published Date: 2020-01-28 | Source: Stephen Gunnion | Author: Stephen Gunnion

Investec fund reduces SA exposure

Investec Property Fund has sold two SA malls which will provide further funding capacity for its growing European logistics portfolio.

Investec Property Fund (IPF) has continued to recycle the proceeds from the sales of SA properties into Europe, where it sees better returns.

The real estate investment trust has sold its controlling stakes in Musina Mall in Limpopo and Boitekong Mall in Rustenburg in the North West for R727 million. It said the malls were sold at a 3% discount to book value and the sales were in line with its strategy to recycle capital through disposals and redeploy it into long term value-enhancing assets that provide better risk-adjusted returns.

Last month, IPF bought two logistics properties in Belgium for €70.4 million (R1.14 billion) to expand its portfolio of Pan-European logistics assets and allow it to tap into Belgium's thriving logistics sector, which is driven by e-commerce and steady economic growth. At the time, it said European logistics was the top performer for the fund on a risk-adjusted basis over the last 18 months.

Following the disposal of the two malls and the recent Belgian acquisitions, it said its loan-to-value would remain in line with the level reported at the end of September and its offshore exposure would increase to 23% from 18.6%.

The fund's growing offshore exposure has cushioned it from subdued growth in SA. In the six months to end-September, the European logistics platform delivered a 20.1% total return and Investec Australia Property Fund (IAPF) returned 27.4% on the back of its listing on the Australian Securities Exchange in May. It made an initial investment of €10 million into a new Pan-European light industrial platform during the second quarter of its financial year.

Its shares closed unchanged at R13.89 yesterday.





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