Galetti considers listing in future
Property brokerage firm Galetti, which has created a data management system that captures information such as rental comparisons, is looking at listing on the stock exchange in the next few years, CEO John Jack says.
Property brokerage firm Galetti, which has created a data management system that captures information such as rental comparisons, is looking at listing on the stock exchange in the next few years, CEO John Jack says.
Since 2010 the company had spent a few years developing a property data management system called Rebase, which could help it make a case to equity investors to list.
Rebase provides data about what tenants at properties competing with Galetti’s clients are paying for rent, and other information, such as vacancy rates in popular areas and when leases are due in certain buildings.
“I don’t think there are other property advisory groups who have as good a system. We have built a system that doesn’t overwhelm its clients with information about every aspect of a building. The data is instead tailormade for them,” said Jack. “If we can get a partner to back us, we could list Galetti or Rebase as a separate business.”
Galetti , which was launched in the Western Cape by Tony Galetti and Francois Staples in 2006, has offices in Cape Town, Johannesburg and Pretoria.
It employs about 40 people across its three core businesses: brokerage, corporate services and capital markets. As many as 18 of its staff are focused on deal-making.
Jack, who previously worked in property management at Broll in Cape Town and Johannesburg, said he wanted to position Galetti to compete with these larger companies.
“We are still relatively young but we are pulling our weight and with our focus on commercial we are making steady progress,” he said.
A total of 250 contracts were concluded in Galetti’s last financial year including both lease and sale transactions, up from just 19 contracts concluded in the company’s first year of operation in 2006.
Jack said Galetti was operating in a tough market, especially with regards to offices. Listed companies were reluctant to buy new office properties, despite them being at their lowest prices in years, he said.
“There are many opportunities in office right now but listed companies are wary. They may have bought offices at yields of around 9% a couple of years ago but they are less interested at 11% or 12%,” he said
I think this is because of the high vacancy factor in certain nodes like Sandton. The economy will turn though and then some opportunities will have been missed.”
The national office vacancy rate sat at about 11.3% at the end of June, according to the SA Property Owners Association (Sapoa). Sapoa said it was particlarly concerned about Sandton, which had a vacancy rate of more than 17%.
Other data-gathering groups such as Gmaven have the vacancy rate for Sandton, SA’s most developed and valuable commercial node, at more than 20%.
Jack said Galetti would focus on being a business-to-business service provider and that this was enhanced by Rebase.