Rebosis CEO Sisa Ngebulana said yesterday the move would lead to "a massive rerating" for Rebosis as retail properties, particularly shopping malls, were held in higher regard by investors than other real estate assets.
"Retail funds are highly prized by many investors, while government assets have tended to be less so. Part of the process of making Rebosis a retail fund is that Ascension Properties, which we majority-own, will hold Rebosis's government assets.
"In this way, we can manage Rebosis as a retail fund that is attractive to South African and offshore investors seeking retail exposure," Ngebulana said yesterday.
In 2011, Rebosis became the first black-managed and black-owned property fund to list on the JSE, with assets worth R3.6bn.
Ngebulana's team has grown assets to about R15bn.
Rebosis owns four retail properties including its flagship Hemingways Mall and Mdantsane City in the East London area, and Sunnypark Mall and Bloed Street Mall in Pretoria.
Ngebulana also heads the Billion Group, which develops retail properties for Rebosis.
Executive officer at Meago Asset Management, Thabo Ramushu, said that the decision was a smart one on the part of Rebosis.
"It does make sense for Rebosis to be a focused retail fund. The combination of quality Rebosis retail assets and potentially the injection of Billion retail assets will result in a potential rerating," Ramushu said.
Stocks with an exposure to statetenanted assets had been discounted by the market, he said.
"There is always going to be a discount applied to stocks holding significant government portfolios in SA, given recent controversial leasing tenders and moratoriums on long leases, as unjustified as that may be," said Ramushu.
Ngebulana said part of the attraction of Rebosis was not only that it owned strong performing retail assets in SA, but also the company's exposure to offshore malls.
Rebosis Property Fund owns a controlling stake in UK mall owner, New Frontier Properties.
Fundamentals were strong in the European economy, which would support Rebosis's performance next year, Ngebulana said.
UK consumer confidence is at its highest since the 1990s, according to market researcher GfK.
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