Rebosis starts with office sale
Rebosis Property Fund has begun to sort out some of its structural problems now that founder Sisa Ngebulana has returned to his CEO role, starting with an office sale.
Rebosis Property Fund has sold offices worth nearly R900m in a bid to reduce debt levels and to increase its bias to retail assets.
This is the first step founder Sisa Ngebulana has taken to sort out structural problems at the fund — such as being overindebted — since he returned to his CEO position in April.
“We have begun to clean up our portfolio, starting with this sale,” he said. “It will help us to bring our gearing down, which is one of our goals.”
Through its subsidiary, Ascension Properties, Rebosis has agreed to sell an office portfolio to Boxwood Property Investment Fund for R888m.
The proceeds of the disposal would be used to settle debt.
Boxwood, which is led by former Vunani Property Investment Fund CEO Rob Kane, buys commercial properties and redevelops them.
It has acquired 14 Long Street, 45 on Castle, Bergstan Building, Matrix Building, Nedbank Building and Rebosis House.
Ngebulana wants his fund’s portfolio to be 80% retail and 20% office in a few years.
Prior to the deal, retail accounted for 46% of Rebosis’s portfolio. Offices accounted for nearly 53%. After the deal the office portion of the total Rebosis portfolio would be about 50.5%.
Ngebulana said retail assets provided the best income growth potential for Rebosis.
Retail assets had contributed 40% of the company’s net income, offices 59% and an industrial asset 1% during Rebosis’s latest financial reporting period, which was for the half year to February.
Rebosis has targeted getting its debt or loan to value level to 32.7% by the end of December 2018. At the end of February, its loan to value was 48.3%.
The sale to Boxwood would improve this to 46.9%.
Ngebulana said Rebosis had actually planned to conclude the Boxwood transaction in September. “We are ahead of schedule,” he said.
Rebosis’s share price was R8.32 at the close on Tuesday.