Synergy Income Fund has recently enhanced its management structure by bringing its full property management operations in-house.William Brooks, CEO of Synergy, explains that a simpler, more efficient structure will deliver better value to investors, better align management structures to investor objectives and produce numerous long-term benefits.
“Our new operational structure, effective from October 2012, involves direct active management of our portfolio and a clear investment focus to drive growth of our property portfolio. We believe this approach will be key in delivering sustainable investment performance in the future,” says Brooks.
JSE-listed Synergy Income Fund Limited is a property loan stock company with assets of R1,7 billion. It is a specialised retail property fund with an investment focus on medium-sized community and regional shopping centres in high-growth nodes. Synergy’s portfolio favours commuter centres in township areas and rural towns. Synergy operates closely with the Spar Group, one of South Africa’s leading retail groups.
Capital Land Asset Management (Pty) Ltd is Synergy’s external asset and property manager directly accountable for the management of the Synergy portfolio– financial, asset, operations, legal, compliance and leasing. Capital Land initially operated a hybrid management model with a combination of internal and outsourced property management, in order to establish which method was most suitable to Synergy.
“We are confident that a full service internal management model is the preferred structure to deliver the operational performance we want from our retail portfolio,” says Brooks. “It creates a clear management structure with direct accountability, all levels of management are clearly aligned to Synergy’s investor interests, we now control and operate our own IT systems, operational and financial performance can be accurately measured and the portfolio can be effectively and directly managed under one roof.”
In changing to internal property management, the company has secured valuable continuity of key management experienced in property operations and familiar with Synergy’s portfolio. “We have established the management structures and several key individuals that were working on our portfolio in an outsourced capacity have now joined the Synergy team,” says Brooks.
The move will triple the size of Synergy’s management team to around 60 employees, most of whom will be located at the Synergy head office in Claremont, Cape Town. Synergy also recently opened a new regional office in Sandton where its Gauteng regional team will be based.
“Our portfolio of properties is well positioned to benefit from growth supported by our direct active management structure,” says Brooks.