Pivotal Managing Director, Jackie van Niekerk
Pivotal Property Fund has announced that it plans to list on the main board of the JSE by December.
Pivotal is a property investment and development fund with an A-grade portfolio of income producing property assets and an exciting pipeline of prime developments. The company’s strategic partnership with leading South African property developer and manager Abland, as well as other developers, will ensure a continuous pipeline of high quality, value-adding development opportunities.
For two decades Abland has delivered a number of South Africa’s foremost property developments. Pivotal was first incorporated by Abland in 2005 to hold its top quality completed real estate assets. In 2009, Pivotal became publically traded in the over-the-counter market.
Pivotal Managing Director, Jackie van Niekerk, says: “Pivotal’s JSE listing will provide the company with access to equity funding to continue pursuing both development and acquisition growth opportunities while also providing investors with access to an A-grade portfolio with superior returns over the long term.”
The fund’s assets comprise an income-producing portfolio valued at around R7,8 billion and a strategic development portfolio presently valued at R1.4 billion, but ultimately expected to be valued at around R6 billion when developed. This would increase the value of Pivotal’s portfolio to more than R14 billion.
Pivotal achieved growth in net asset value per share of 45% for its financial year ended 28 February 2014, and has delivered a compounded annual growth rate in net asset value per share of 24% since 2009.
“Pivotal is expected to continue to achieve strong growth going forward and give investors the opportunity to share in sustainable capital growth from prime commercial real estate income streams and developments,” says Van Niekerk.
In the lead up to its JSE-listing, Pivotal will undertake an equity capital raising of around R1 billion by way of a private placement. Pivotal is expected to list with a market capitalisation of around R4.8 billion.
Aaron Suckerman, Pivotal’s Financial Director, comments: “The net proceeds of the equity capital raise will be used to settle a portion of the purchase consideration of some our recently acquired properties and to settle a portion of our interest bearing debt. This will provide Pivotal with the flexibility to take advantage of new opportunities.”
In September this year, Pivotal announced a R1.5 billion acquisition from Standard Bank, which included the majority stake in Sandton’s landmark Alice Lane development. The acquisition of the remaining 70% stake in Alice Lane sees Pivotal becoming the sole owner of this Premium-Grade office complex. Other strategic stakes in high-profile properties acquired as part of the deal include: Lakeview Office Park in Roodepoort; Monte Circle Office Park development land in Fourways; and, the West End Office Park development in Centurion.
Pivotal is internally managed and benefits from a board that is rich in skill and steeped in property expertise. Leading the executive team is Van Niekerk, who has played a key role in Pivotal since 2009. She is joined by Suckerman and Executive Director, Dave Savage, of Abland who has a career spanning more than 25 years. Savage is also a co-founder of Pivotal.
Pivotal’s eight non-executive directors, of which five are independent, bring a wealth of knowledge and experience to its board. Tom Wixley is independent non-executive chairman. He is a CA(SA) and former partner and chairman of EY. Marc Wainer, Thando Sishuba, Tony Dixon, Chris Ewing, Abland co-founder Thys Neser, Stewart Shaw-Taylor and Angus Mackay are among the other non-executive directors.
Key to Pivotal’s strategy is its investment criteria of well located, prime A-grade commercial, industrial and retail properties.
Pivotal’s diversified income-producing asset base comprises 33 well-established, high-quality properties. This robust portfolio is 98.5% let and is 80% occupied by A-grade tenants.
By area, Pivotal’s income-producing portfolio comprises 47.4% retail properties, 50.4% offices and 2.2% industrial property. It spans three provinces, with 91.1% of its portfolio by area in the economic hub of Gauteng, followed by 6.1% in the Free State and 2.8% in the Western Cape.
Landmark assets within the income producing portfolio include: Centurion Lifestyle Centre, a 40% stake in the flagship Cradlestone Mall in western Johannesburg, the Wonderboom Junction shopping centre in Pretoria, Goldfields Mall in Welkom, the Alice Lane office development at a prime address opposite Sandton City in the Sandton CBD, Ballyoaks Office Park, Stoneridge Office Park and several nearby office buildings in Modderfontein.
The development portfolio includes, among others, the landmark Loftus Park in Pretoria, adjacent to the iconic Loftus Versfeld Stadium, which will comprise a mixed-use office, hotel, Virgin Active gym, various restaurants and conference facilities, situated around a vibrant central piazza. In the Montecasino precinct in Fourways, Pivotal will in partnership develop the 56 000m2 Monte Circle Office Park and the 34 000m2 mixed use offices, retail and hotel Signature Square development. A further development in the Pivotal pipeline, but not yet part of the Pivotal portfolio, includes securing a stake in the Hazeldean Regional Shopping Centre. This centre is part of an 800ha nodal development in Pretoria.
Pivotal also has an 80% interest in the Kyalami on Main Mall, in partnership with Retail Africa (20%). This 25 000m2 retail development enjoys a prime position at a busy arterial intersection and will offer upscale convenience shopping and dining.
“By listing Pivotal, we will gain improved access to capital, which will enhance our ability to pursue opportunities when they arise in order to continue to generate attractive returns for investors,” says Van Niekerk.