R150m acquisition to beef up Nedbank’s portfolio in Pivotal Property Fund

Nedbank Corporate Property Finance Regional Executive in Gauteng, Ken Reynolds says the R150 million investment forms part of the bank’s commitment to support, and participate in, the growth of South Africa’s promising listed property sector.

Nedbank Corporate Property Finance said on Wednesday that it had extended its asset base into property investment development fund, Pivotal Property Fund with a R150 million investment.

The investment saw Nedbank acquire 12 000 ordinary shares, giving the bank a 15% shareholding in the Fund.

The shares were part of a new issue by Pivotal Property Fund aimed at raising funds to acquire a 40% undivided share in  Cradlestone Mall, the new 76 000m2  regional shopping centre in Mogale City, north west of Johannesburg, that was opened on Wednesday 20 November.

According to Ken Reynolds, Regional Executive of Nedbank Corporate Property Finance in Gauteng, the R150 million investment forms part of the bank’s commitment to support, and participate in, the growth of South Africa’s promising listed property sector.

“Despite a relatively muted 2013 for most of South Africa’s property sectors, property funds have generally continued to go from strength to strength, and Pivotal Property Fund is no exception, with its enviable property portfolio making it a highly appealing investment opportunity,” Reynolds explains.

Reynolds also points to the reason behind the additional shares made available by Pivotal as a key reason why Nedbank chose to invest in the fund. “The fact that Pivotal used the money it raised from the share issue to acquire Cradlestone Mall demonstrates that it shares Nedbank Corporate Property Finance’s optimism about, and commitment to, the SA property sector as a whole, and any such efforts to expand its already excellent commercial and retail property portfolio should build Pivotal’s capacity to continue to increase the returns it has thus far provided its investors well into the future,” he says.

According to Reynolds, the Fund’s recent decision to include dividend distributions along with its historic capital growth value proposition to clients is further evidence of the excellent growth and steady evolution of this increasingly important roleplayer on the SA property fund landscape.

“Pivotal’s stated intention to steadily increase its property portfolio through direct acquisitions combined with direct participation in greenfields developments means the fund affords Nedbank a unique opportunity to further extend its established competitive advantage, which we will, in turn, leverage to the advantage of our current and future clients.”

“In addition to its diversified portfolio and quality underlying assets, Pivotal boasts a very reputable executive management team, a strong asset pipeline, and a well diversified portfolio, all of which is perfectly rounded off as a compelling investment opportunity by the fund’s stated intention to list as a REIT within the next five years.”

Nedbank Corporate Property Finance was voted the best Property Finance bank in the 2013 PricewaterhouseCoopers (PwC) South African Banking Survey.

The South African banking survey by PricewaterhouseCoopers indicates the continual importance of retail markets to the banks.