Prop­erty

Finweek English Edition - - COMPANIES & INVESTMENTS -

Fol­low­ing up on the Fin­week cover story from last week on off­shore prop­erty in­vest­ments (5 Septem­ber is­sue), as­set man­age­ment firm Clu­casGray be­lieves that it has iden­ti­fied a great off­shore in­vest­ment op­por­tu­nity in the form of Sir­ius Real Es­tate, which has ex­po­sure to Ger­man in­dus­trial and ware­hous­ing prop­erty.

Sir­ius Real Es­tate is held i n t he Clu­casGray Fu­ture Ti­tans Flex­i­ble Fund, which aims to in­vest in funds out­side of the JSE Top40 and can hold up to 25% of its port­fo­lio off­shore. The fund is man­aged by Bren­don Hub­bard and in­vestors can par­tic­i­pate in the fund with ei­ther R1 000/month debit or­der or a lump sum of R20 000. Hub­bard tells that there are a num­ber of rea­sons why they like Sir­ius, in­clud­ing: to the value of the properties it owns. This is un­like the sit­u­a­tion in South Africa where a num­ber of listed prop­erty com­pa­nies trade at a sig­nif­i­cant pre­mium to the prop­erty value. prop­erty val­ues in Europe be­gin to creep higher af­ter fall­ing over 40% since 2007. been in­ter­nalised, sav­ing share­hold­ers a for­tune in ex­ter­nal man­age­ment fees. team in high re­gard, and re­sults to date have been ex­cep­tional con­sid­er­ing the trou­bles in Europe. real threat to shop­ping malls – par­tic­u­larly in Europe – the as­set man­ager has elected to fo­cus on in­vest­ments in in­dus­trial and ware­hous­ing prop­erty.

div­i­dends some­time soon, ul­ti­mately

tar­get­ing a 7% euro div­i­dend yield. of debt re­struc­tur­ing by is­su­ing one of the largest pri­vate bonds in Ger­many to Euro­pean fam­ily of­fices. They ex­pect phase 2 of the debt re­struc­tur­ing to be com­pleted shortly. In June, Credit Suisse noted the fol­low­ing about the Ger­man prop­erty mar­ket in its

com­mer­cial prop­erty will re­main fairly sta­ble in the com­ing months as the Euro­pean Cen­tral Bank’s mone­tary pol­icy is likely to re­main (too) loose for Ger­many, and rental mar­kets should ben­e­fit from mod­est but con­tin­ued pos­i­tive eco­nomic growth (+0.5% in 2013, +1.7% in

main­tain our pref­er­ence for re­tail proper- ties over of­fices. The Ger­man con­sumer sec­tor is ex­pand­ing due to ris­ing real in­come lev­els and low un­em­ploy­ment. High-street Ger­man rents are trend­ing up­ward, and this is un­likely to change in the near term.”

A con­fi­den­tial an­a­lyst re­port that Fin­week has seen, con­cludes its “Buy” rat­ing say­ing: “Sir­ius is a clas­sic ex­am­ple of a listed real es­tate com­pany overex­tended by a pre­vi­ous man­age­ment, now ex­hibit­ing clear signs of re­cov­ery and a po­ten­tial re-rat­ing. The shares trade at a sig­nif­i­cant 48% dis­count to our (re­duced) NAV fore­cast in light of a much needed re­fi­nanc­ing so­lu­tion in or­der to se­cure the core €400m Ger­man in­dus­trial/of­fice port­fo­lio. The re­fi­nanc­ing is un­der way, and may com­plete in the next few months, fol­low­ing which the div­i­dend can be reassessed. The pay­out pri­mar­ily re­lies upon capex

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