Western Cape based property group, Spear Reit lists on JSE

Western Cape based property investment group, Spear Reit, on Friday listed on the JSE's Alternate Exchange (AltX).

Prior to the listing, the company planned to raise up to R112.5m through a private placement with invited investors.

Spear is led by entrepreneur and former Redefine Properties director Mike Flax.

The relatively small real estate investment trust has assets worth R1.5bn and a market capitalisation of about R900m.

Flax said Spear would appeal to people who were seeking to invest in a specialised property company with high growth potential.

"The Cape metro area grew about 7% last year; compare that with SA, which is struggling to grow at half-a-percent. We are investing in a diverse range of assets in the Cape and believe we can offer dividend growth in the teens each financial year for the next five or so," said Flax.

Spear listed at R9.25 per share and closed at R9.30. It traded on a forward yield of 8.2%. Spear’s investment portfolio in the Western Cape is made up of 21 properties comprising a mix of 1% residential, 46% industrial, 22% retail, 22% office and 9% hospitality.

Some of the fund’s property is situated in the Cape Town central business district and the suburbs of Newlands, West Beach, Woodstock, Milnerton and Tyger Valley.

The total gross lettable area of the portfolio is 172,000m².

Of the properties, 49% was being let to single tenants and 51% to multiple tenants including JSE-listed entities.

Flax said Spear could grow its assets to about R7bn in the medium term.

Retail-focused Liberty Two Degrees and a UK-based property player, Schroders are set to list on the JSE early december.