The nuisance factor

Posted On Thursday, 01 November 2007 02:00 Published by eProp Commercial Property News
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Listed property fund Hyprop's pounce on a 31% stake in fellow fund Sycom shows that the battle for size and dominance in this sector continues

Property-Housing-ResidentialProperty investment is globalising and foreign investors will be attracted only to large, highly liquid funds. Funds that attract them will have lower yields, higher value and their managers will get bigger fees. Growthpoint, with a market capitalisation of R15bn, is the only SA fund of that size and the rest are scrambling to join them.

On the surface, Hyprop took advantage of the decline in Sycom's share price relative to Hyprop.

But that transaction covers the relative ambitions of Madison's Wolf Cesman and Marc Wainer, the oldest and canniest operators in SA property and a consortium of developers who through unlisted fund Attfund have become one of SA's biggest property owners in about a decade. Madison is Hyprop's asset manager and consortium members Louis Norval and Neno Haasbroek control Sycom's asset management company.

Cesman and Wainer have little hope of owning Sycom. It's a property unit trust (Put), controlled by its management company and not unit holders. The consortium plans to merge Sycom with Attfund to reach the right mass. Hyprop's buy is an intrusion.

Hyprop can make a nuisance of itself by giving close and undivided attention to Sycom's recent desultory performance under CEO Haasbroek. Meanwhile, it has every reason to hang on to the shares and leave it to Atterbury to come up with something more enticing than regular payouts.

First prize could be a swap of its 31% of Sycom for 31% of Sycom's properties to bulk up Hyprop.

But there are other possibilities. Madison is still negotiating to buy Fountainhead's management company from Standard Bank Properties and merge Hyprop into Fountainhead. "We're on record as saying we want to create a very big focus ed retail fund, which is why we bought Sycom," says Haasbroek. "But Hyprop is probably premature."

Last modified on Tuesday, 22 April 2014 19:00

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