Redefine intends to quit Hyprop entirely
CEO quits board as Fountainhead stake now ‘makes companies competitors’
REDEFINE Properties CEO Marc Wainer has retired from the board of Hyprop Investments — signifying a shift in the relationship between property players Redefine and Hyprop towards one of direct competition.
Retail-focused Hyprop announced yesterday that Mr Wainer, a Hyprop nonexecutive director, would retire after Hyprop’s annual general meeting on June 27, along with independent nonexecutive director Jabulane Mabuza.
Mr Wainer said yesterday that leaving Hyprop “was always on the cards — because after building up our stake in Fountainhead, we’re a direct competitor”.
Redefine, which owns Fountainhead Property Trust’s management company, recently acquired a 46% stake in Fountainhead, a retail-focused property fund, which is a competitor of Hyprop.
Redefine has said this was in line with its intention to acquire a meaningful Fountainhead stake to align its interests with shareholders should its bid for Fountainhead’s assets not be completed.
Redefine acquired the Fountainhead units for R5bn, in return for Hyprop units, cash and Redefine units. Mr Wainer in March said Redefine was exiting Hyprop, “which we consider mature”, saying there was “greater upside” to Fountainhead.
Redefine’s holding in Hyprop is about 11%, significantly reduced from about 30% prior to the Fountainhead investment. Mr Wainer said yesterday Redefine intended to quit Hyprop entirely after converting to a real estate investment trust (Reit), in order to benefit from Reit capital gains tax treatment. Redefine had been involved in Hyprop since about 2001 when Hyprop’s market capitalisation was about R400m, he said.
“It’s been fantastic, we’ve really enjoyed it”, he said. “We can say, without fear or favour, that we were largely instrumental in the growth of the portfolio.”
“From a personal point of view, it was fantastic to be involved in that, but we are now direct competitors and I would have conflicts,” said Mr Wainer.
Hyprop’s chairman, Michael Aitken, also retires from Hyprop’s board next month. He is to be replaced by independent nonexecutive director Gavin Tipper.
Hyprop said: “Both Michael Aitken and Marc Wainer have served on the board for in excess of 10 years and have contributed significantly to Hyprop’s success during this time.”