April 2007:
THE unrelenting targeting of Cape-based listed property companies by big corporates continues.
Last month the Public Investment Corporation (PIC) made a surprise bid to buy out CBS Property, the highly rated Cape-based property fund. The PIC, which basically represents the Government Employees Pension Fund, already holds 13% of CBS.
If the deal is successful it will follow hard on the heels of a host of similar deals, most notably Spearhead (acquired by Redefine), Prima Property (now part of Apex-Hi), Good Cape (acquired by Calulo) and Paramount (now controlled by Growthpoint).
And don’t forget that unlisted landmark properties like Canal Walk (now owned by Hyprop) and the V&A Waterfront have also been snapped up by well heeled outsiders.
The last significant Cape property contender Atlas (which owns the Bayside Mall in Tableview and Somerset Mall) also looks set for corporate action with Acucap building a meaningful stake in the group. Atlas was trading under cautionary when CBN went to press.
The fact that almost all the Cape-focussed property listings have been swallowed in corporate action speaks volumes for the quality and potential of the region’s retail, commercial and industrial properties. What a pity then that no significant Cape portfolio remains in the hands of local investors and local management.
CBS, which only listed on the JSE in 2005, owns a number of top notch Cape-based properties – including The Quayside (Simonstown), 35 Wale Street, Amway House (Waterfront), Buitengracht Centre, Meadowridge Pick ‘n Pay Shopping Centre, the Damelin Building in Mowbray and the Matador Centre.
More recently the group has broadened its sphere by acquiring portfolios to diversify away from its core Cape base.
It seems certain that the PIC will execute the buyout of CBS since the offer price of 1200c/share represents a considerable premium on the property group’s historic trading ranges on the JSE.
The deal values CBS at over R2 billion – which is a far cry from the R800 million value when the group listed about two years ago.
Clearly the consolidation in the SA property sector has unceremoniously snuffed out the Cape presence in the JSE’s Real Estate sector. Physically this means landmark building like The Golden Acre, Spearhead House on the foreshore and the old Pick ‘n Pay HQ – assets which gave a unique Cape presence to portfolios – are now lumped together with larger national portfolios.
Currently the last surviving Cape property listings are the highly specialised Oasis Crescent Property and Shops for Africa (which is yet announce its first deal).
Hopefully both are too small (for the moment) to attract the attentions of the host of property predators looking for the next kill…