Liberty Two Degrees raises R3.8bn
LIBERTY Two Degrees, the newly established real estate investment trust that raised R3.8 billion from its JSE listing yesterday, anticipates concluding a significant acquisition early next year.
Amelia Beattie, the chief executive of Liberty Two Degrees, confirmed yesterday that it had some time ago identified an acquisition of the same quality and iconic nature as the property portfolio that had been listed.
Beattie said details of the acquisition would be announced to the market early in the new year and the transaction would be concluded in the first half of the year.
She said Liberty Two Degrees would have R2.65bn after listing costs and the R1bn that had to go back to Liberty Group, with a significant amount of this capital used for the acquisition.
The company’s listed property portfolio, valued at about R6bn, comprises interests in major property assets including Sandton City, Eastgate Shopping Centre, Nelson Mandela Square, Liberty Midlands Mall, Liberty Promenade and Melrose Arch.
The about R3.8bn raised on listing yesterday comprised R3bn at listing price to invited investors and R780 million from Liberty Group using new policyholders funds, who subscribed at a 5 percent discount to the listing price.
Beattie said it had decided to pursue a domestic asset offering for Liberty Two Degrees “to start off ” and did not plan to invest in any assets outside of South Africa for now.
She said it saw good opportunities in the short term to deploy capital in the South African market.
However, Beattie said the trust would eventually look at opportunities in the rest of Africa to introduce assets of the same quality as the current portfolio without creating undue risk to the portfolio.
Beattie said the listing had exceeded the company’s expectations with the first trade at R12 a share.
The subscription price to invited investors was R10 a private placement unit while the subscription by Liberty Group was at a 5 percent discount to the subscription price payable by invited investors was R9.50 a private placement unit.
Shares in Liberty Two Degrees closed yesterday at R10.50 a share.
Beattie said that this was a landmark listing in the South African market featuring super regional and regional assets that were co-owned and managed by an experienced team who had already been associated with this portfolio for the last decade.
“Listing this portfolio not only unlocks value for existing policyholders but also provides an alternative investment opportunity to investors and policyholders with an appetite for premium property assets in the listed environment,” she said.
Beattie added that the appeal of listed property was that it provided investors both an income stream and capital growth over time.
“We believe the defensive nature of the property assets underpinning the value of this portfolio will in time provide balanced returns and growth through evolving economic cycles,” she said.
Donna Nemer, the director of capital markets at the JSE, said Liberty Two Degrees’ listing was the JSE’s 17th this year and increased the number of listed property sector companies on the JSE to 63 in total, of which Liberty Two Degrees was the 52nd to list on the main board.
Thabo Dloti, the group chief executive of Liberty Holdings, said the listing of a portion of its prestigious property portfolio was a proud moment for Liberty and another milestone achieved by the investment company in its stated strategy to deliver growth in alternative investment businesses.
“We believe the value proposition of this premier portfolio of properties will be attractive to investors and continue providing Liberty’s customers with an alternative investment that we think will significantly add to the dynamics of the listed property sector of the JSE,” he said.