Shops For Africa to relist

Posted On Friday, 07 September 2007 02:00 Published by eProp Commercial Property News
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Shops For Africa Ltd, which has been operating under a cautionary since early June 2007, is planning to relist on the JSE as a new look, recapitalised property investment and development company to be called SA REIT LTD

Arnold Maresky IngenuitySA REIT will be listed towards the end of September in the Real Estate Holdings and Development sector of the JSE.

The company announced today that it has entered into agreements to acquire a portfolio of 10 properties, including three development opportunities, for a total consideration of R370million. It proposes settling these acquisitions through the issue of 546 million shares at 50c per share equating to R273million via vendor placements with the balance being funded from borrowings.

The transactions constitute a reverse takeover in terms of the listing requirements as the issued share capital of the company will have more than doubled following the acquisitions.

The venture is being driven by Arnold Maresky, a former director of Paramount Property Fund Ltd. Arnold was appointed CEO of Shops in March and has assembled a strong management team and board of directors.

SA REIT will be an important investment for JSE-listed Trematon Capital Investments Ltd who will be represented on the Board and investment committee and, together with Rabie Property Group, will provide strategic guidance where necessary.

Arnold Shapiro, the CEO of Trematon, said that the Trematon board had a lot of confidence in the SA REIT team and the other strategic partners. The SA REIT executives would also hold significant equity in the company in order to ensure that the interests of management and shareholders are aligned.

Maresky said that SA REIT LTD was looking to differentiate itself through key management and superior development skills and they were confident they had assembled the strongest possible team to achieve this.

The handpicked Board of Directors comprise some of the top names in the property industry who have widespread and complementary property development, asset management and financial skills.

It comprises Maresky, the CEO, a past executive director of Paramount Property Fund Ltd and director of the Spire Property Group, who spearheaded the growth of that company; and financial director and company secretary, Mark Wagenheim, a chartered accountant who has a strong financial background. The third executive director is John Bielich, a civil engineer and project manager and past director of the Spire Property Group.

Non-executive chairman is Monty Kaplan, former CEO of Cape of Good Hope Bank and a past director of Spearhead. He is joined by non-executive directors Allan Groll (also ex-Spearhead ) a well-known Cape investor and developer; quantity surveyor Abu Varachhia; Raymond Schur (chairman of the Audit Committee) who is a former Financial Director of Woolworths; Arnold Shapiro, the CEO of Trematon; leading South African architect Dennis Fabian and Leon Cohen, MD of the Rabie Property Group, one of the country’s leading property development companies with 30 years experience in commercial, retail and industrial property development.

Maresky said Rabie Property Administrators, a wholly owned subsidiary of the Rabie Property Group, which currently administers about 25 buildings in the Western Cape including three shopping centres with a total capital value in excess of R1.2bn, would be responsible for the day to day management of the company’s property portfolio.

Cohen, who with the other directors of Rabie Property Group will jointly hold 15% of the equity in SA REIT LTD, said it provided them with an ideal opportunity to diversify their asset base.

“We will be bringing our collective development skills to the table providing great opportunities and synergies between the two companies,” he said.

Maresky said today that the acquisitions, which are subject to regulatory and shareholders’ approvals and the lifting of the suspension on the trading of Shops shares, were being made in line with the company’s strategy to create a leading South African property investment and development company that delivers capital returns above the market average. Properties had been selected where the company could add value and thus create superior returns for shareholders down the line, he said.

The proposed portfolio comprises nine commercial and industrial properties in the Western Cape and one in Port Elizabeth.

The Cape Town properties include three exciting re-development opportunities in the heart of Cape Town CBD – 33 Waterkant, and the Curry and CMH buildings, the latter two of which comprise an entire block bordered by Hans Strijdom, Bree and Long Streets which they plan to redevelop at a cost of about R500m.

Other buildings in the portfolio are 22 Long Street (the old Liberty Life building), the Midas buildings in Goodwood and Port Elizabeth, the Natural Stone Warehouse in Paarden Eiland, and a site assembly on the Foreshore which comprises the Master Tyre, African Wholesalers and Reeds buildings.

Maresky said that while the portfolio would initially be concentrated in the Western Cape, it was envisaged that this would be expanded countrywide in due course.

“The branding of the company as SA REIT LTD was applied with foresight as the industry faces changes in line with international trends. We want to remain ahead of the pack.”

He said the proposed acquisitions had received strong support in the market and the successful completion of the transactions would see Trematon holding 18%, and Absa and Nedbank a total of 14% of the equity in SA REIT LTD. These key banking and Investment partners are testament to the confidence the market has in the management of the Company.

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