Musical chairs shake listed property sector
The listed property sector has been hit by unexpected management changes, further denting already weak investor confidence.
Industry veteran Pieter Prinsloo’s quitting on Tuesday as CEO of blue-chip mall owner Hyprop Investments resulted in the share price dropping to a two-year low of about R90.
Prinsloo, who was at the Hyprop helm for 14 years, will be replaced by Morne Wilken, the CEO of European-focused MAS Real Estate.
Wilken, previously CEO of Mall of Africa owner Attacq, has been at MAS only since January. The company has not yet appointed a successor for Wilken. The share price is down about 7% over the past week.
In another surprise move, Texton Property Fund CEO Nosiphiwo Balfour tendered her resignation in September. Texton’s share price has shed about 16% since her departure was announced on September 14, barely a year after she took over from Nic Morris.
Investec Property Fund also announced leadership changes in July, with CEO Nick Riley to make way for new joint CEOs Andrew Wooler and Darryl Mayers from December 1.
Investors are no doubt unsettled by some of these moves, particularly given that market sentiment has already taken a knock this year.
The SA listed property index tumbled 27% year to date, partly due to the sell-off of the Resilient stable of shares following allegations of insider trading and share-price manipulation.
The sector has also disappointed on the income growth front, with dividend payouts up only about 5% for the June reporting period, down from an average 10% in 2017.
Convincing the market that PSG-controlled agribusiness investor Zeder is more than a proxy for consumer staples giant Pioneer Foods has not been easy. In spite of a marked drop in the share price, the major stake in Pioneer – worth about R5.3bn – still represents about 50% of Zeder’s R10.6bn portfolio. At one point, Pioneer represented more than 70% of Zeder’s portfolio value. So now is a good time for Zeder’s other investments to attract more attention.
A deal in September that saw 97.5%-held fruit marketing subsidiary Capespan sell its shareholding in Chinese fruit production and marketing entities Golden Wing Mau Agriculture Produce Stock and Xinguojiayuan Modern Agriculture Company (Joy Wing Mau) might well have altered market perceptions. The sale will bring in almost R1.2bn to Capespan. This is a significant sum, especially considering that Zeder valued its Capespan holding at R2.26bn at the end of February this year.
The market, however, was largely unmoved by Capespan’s Chinese transaction, with Zeder’s share price tracking mostly flat. If anything, the market discount to the latest sum-of-theparts valuation of about 624c per share has narrowed slightly to just under 25%.
Possibly the market is awaiting more details around the Joy Wing Mau transaction. Does Capespan mobilise the proceeds to expand its logistics hub, or invest in more of its own fruitproducing farms? Or will Zeder – which is carrying a higher debt load than in previous years – “convince” Capespan to pay a special dividend?