UK MALL owner New Frontier Properties, which has attracted South African investors seeking a rand hedge, plans to list on the JSE main board by the middle of the year.
CEO Mike Riley said the company expected to achieve a forward yield of 7.6% for the year to August as it benefitted from a strong UK consumer. New Frontier is the UK investment subsidiary of Rebosis Property Fund, which has a significant black shareholding.
“We are receiving a lot of interest from South African investors. Many of them want to hedge against the weak rand. We are on course to list on the main board of the JSE in the next four months or so,” said Mr Riley.
Rebosis CEO Sisa Ngebulana said in March, when Rebosis acquired a controlling 62% of New Frontier, that establishing a strong UK arm would be positive for investors.
Stocks with offshore exposure were among the top performers in the listed property sector last year. Investors have benefitted from euro-denominated dividend payouts.
Top performers included the likes of Romanian mall owner New Europe Property Investments; UK-based Capital and Counties; Rockcastle Global Real Estate, which has a Poland focus; German-focused Sirius Real Estate; and Resilient Property Income Fund, which has significant offshore exposure.
Mr Riley said New Frontier Properties was positioned to excel in a strong UK economy.
“The UK economy is expanding, with positive GDP (gross domestic product) growth, falling unemployment and improving household disposable income, resulting in rising retail sales. In this environment, the company plans to grow assets significantly in the next 12 months and has identified a number of potential acquisitions, which it is currently evaluating,” Mr Riley said.
More South Africans are expected to invest in offshorefocused stocks this year.
“Right now, South African investors are nervous about investing in SA Inc, and for good reason. Political and economic risks have increased and there is a lot more uncertainty as we head into 2016. Investors who went offshore at the beginning of 2015 have been rewarded with strong rand returns, although very few investors enjoyed strong US dollar returns in 2015 as global markets generally moved sideways or were down slightly,” said Grindrod Assest Management chief investment officer Ian Anderson.