Loan stock Ambit Properties is an Absa initiative, in association with the Marriott property group. They will jointly own the management company. Absa has lent more than R3bn to the listed property sector, and wanted to get actively involved in a new vehicle.

The initial portfolio comprises 34 individual properties acquired at a cost of R508m, but as much as R200m of this, or almost 40% of the total, is in Park Meadows, which is described as a value shopping centre near Eastgate in Bedfordview. It was developed only 18 months ago, with 23 000 m² space.

Boosted by Park Meadows, no less than 64% of the initial retail, commercial and industrial fixed property portfolio is in Gauteng, 14% in Durban, 6% Cape Town and 16% other (largely Pietermaritzburg). Gauteng will remain the focus, with a long-term target exposure of 50%. Other targets are to have 50% of the portfolio A grade and 40% B grade, with gearing between 30% and 50%.

There's also R643m in Namibia's Oryx Properties, equivalent to a 29% stake. Oryx, listed in December 2002, has 14 properties, a flagship retail shopping centre and the rest on long lease to Namibian and SA national companies.

Ambit decided to invest in Oryx rather than directly in Namibian property, as Oryx has definite growth potential and is well followed by Namibian asset managers. Ambit acquired its stake from some of the vendors who sold properties into Oryx at its listing.

The long-term plan is to hold 25% of the portfolio outside SA, but probably not too far away. Ambit sees growing opportunities flowing from trade and SA companies - especially retailers - setting up in neighbouring countries.

While Oryx is a listed investment, Ambit doesn't plan to become a hybrid, like Redefine. It prefers direct investment, and though CEO Nick Harris won't rule out more Oryx-type deals, I get the impression that one was as much opportunism as long-term strategy.

What is clear is that, once listed, Ambit will be looking to bulk up the portfolio towards the talisman R1bn, generally regarded as the minimum size for a viable, cost-effective operation.

Nominal NAV is 196c, marginally below the issue price of R2 per linked unit. However, this ignores a higher independent valuation, which will probably add another 6c or so a unit. So far, 41,9m units have been issued to property vendors, and 31m or so for the Oryx stake. It's now planned to place another 85m, and in fact irrevocable undertakings to subscribe for the full amount have already been received.

Projected forward yield is 12% annualised for the eight months to September, rising to 12,75% for the 12 months to January 2005. Harris reckons this is competitive pricing, and it looks in line with the existing listings.

The scheduled listing date is February 4. Given the pedigree and continuing investor interest in the sector, a modest premium could emerge.