Madison Property Fund Managers, one of South Africa’s largest property managers, announced today that its private placement and public offers were both substantially oversubscribed with applications received of approximately R2.3 billion. The offers were in respect of 130 million Madison linked units at 500 cents per linked unit, amounting to R650 million and closed at noon on Friday 2 June 2006.
Madison is set to list under the Real Estate Holdings and Development sub-sector of the main board of the JSE Limited on Wednesday 7 June 2006 and will be the first listing of a property asset management company in South Africa.
Madison executive directors Wolf Cesman and Marc Wainer attribute the successful response to Madison’s offers to the uniqueness of the company, the market’s appetite for listed property and investor’s search for yield.
The public offer, which was only open to unitholders of ApexHi, Hyprop and Redefine registered on 31 March 2006, in respect of R300 million of Madison linked units, comprising 70 million linked units at 500 cents per linked unit, attracted 2,272 applications in respect of 242,368,300 linked units or R1,21 billion amounting to an oversubscription of more than four times.
“Unitholders of the funds managed by Madison have enthusiastically welcomed the opportunity to invest in a potentially high-yielding instrument in the listed property sector and to participate in the management fees earned from the asset management of the underlying funds in which they are invested,” say Wainer.
Cesman explains that applicants under the public offer who subscribed for up to 9,000 linked units will receive 100% of their application. Applicants under the public offer who subscribed for more than 9,000 linked units will receive 9,000 linked units and approximately 20% of the number of linked units applied for in excess of 9,000 (rounded up or down to the nearest hundred).
The listing of Madison will facilitate the introduction of meaningful black economic empowerment as 20 million Madison linked units, at an aggregate issue price of R100 million were acquired as part of the private placement by Clearwater Capital, a black owned and controlled group. After listing this will comprise approximately 10.6% of the total number of linked units in issue. Clearwater Capital is a KwaZulu-Natal based investment company.
Excluding the 20 million linked units allocated to Clearwater Capital the private placement was almost four times oversubscribed. Applicants under the private placement will be advised of their allocations by close of business, Tuesday, 6 June 2006.
Madison manages listed property funds ApexHi Properties Limited, Hyprop Investments Limited and Redefine Income Fund Limited, with a combined market capitalisation in excess of R15 billion and combined enterprise value of over R20 billion.
Based on the Listed Property Sector - Annual Review issued by Catalyst Fund Managers (Pty) Ltd, the three listed property funds managed by Madison were in the top four performers in the listed property sector in 2005: Redefine first with a total return of 91%; ApexHi B units third with a total return of 65%; and Hyprop fourth with a total return of 63%.
Madison was launched in 2000 by property doyens Marc Wainer and Wolf Cesman. Wainer is regarded as the foremost property dealmaker in South Africa with over 30 years of experience in property asset management, development and property management and Cesman has 38 years’ experience in property asset management, development and property management. The business created and listed two of the most innovative and successful property funds in South Africa – Redefine and ApexHi.
Madison is structured similarly to the listed property loan stock companies, with unitholders investing in linked units and receiving two income distributions a year in the form of interest payments on the variable rate debentures.
The board of directors will consist of executive directors Wainer and Cesman and three non-executive directors, Harishkumar Kantilal Mehta, Monica Khumalo and Bernard Nackan.
“The listing of Madison will create a foundation for the further growth of the business and provides Madison the ability to attract and retain intellectual capital and ensure adequate succession planning through the incentive of meaningful, tradeable equity participation,” explain Cesman and Wainer.
