Sirius Real Estate’s listing on the JSE AltX on Friday was well supported, with 1.2-million of its shares trading in R7.3m worth of deals on its first day.
The JSE is enjoying a pre-Christmas rush of property listings, with Pivotal’s shares starting to trade on Monday and Acsion’s shares on Tuesday. The first Sirius trade opened at R6.00, the same price it closed at after dipping to R5.95, giving it a market capitalisation of about R3.8bn on Friday.
Sirius is the JSE’s first pure German property play. Though Redefine International and MAS Real Estate also have investments in Germany, their property portfolios are spread over other Western European countries.
Sirius already has a primary listing on the Alternative Investment Market of the London Stock Exchange. It raised €40m (R505m) ahead of Friday’s listing in a significantly oversubscribed private placement.
"South African investors already owned approximately 40% of Sirius prior to listing. A secondary listing on AltX was a natural progression as it provides local investors an additional platform to invest and trade in our shares," CE Andrew Coombs said.
Mr Coombs said Sirius’s portfolio of German properties had been independently valued at R6.4bn. He said Sirius was being marketed as a rand hedge against the euro as returns for investors would be euro-denominated, coupled with a business that was driven by Germany’s strong manufacturing sector.
"Investors in the company are exposed to a leading operator of 30 mixed-use, multi-tenanted branded business parks across Germany with more than 1-million square metres of lettable space," Mr Coombs said.
The company’s top 50 tenants accounted for 61% of revenue, and included blue-chip companies such as MAN Diesel, Daimler, Siemens and GKN Aerospace Deutschland.
Chief financial officer Alistair Marks said the capital raised would support the proposed acquisition of a new selection of German business parks for a total cost of €75.6m. The proceeds of the private placement, together with a new debt facility, would be used to fund the acquisition of five business parks with a total lettable area of 111,476m².
Fund managers were attracted to the group’s growth prospects.
"The company tells a good story, especially for private investors. There is appetite for offshore opportunities," said the listed property manager of Old Mutual Investment Group’s MacroSolutions boutique, Evan Robins.
The sector head for property at Investec Asset Management, Peter Clark, said Sirius stood out among other Europe-based funds. "Germany is one of the more attractive markets in Europe with a low cost of finance; however, organic growth prospects are limited," he said.
Brendon Hubbard, portfolio manager at ClucasGray Investment and Asset Management, said Sirius was benefiting from its yield spread. "Right now, Sirius, which invests in the heart of manufacturing in Germany, is an excellent story," he said.
The listing signalled the JSE’s first fast-tracked listing, in terms of the exchange’s new rules.