Property Flash


Rebosis Property Fund, the JSE-listed real estate investment trust (Reit) which was listed by its founder Sisa Ngebulana in 2011, continues to battle to attract institutional investors and to realign its property portfolio.

The group which is now led by CEO Otis Tshabalala is sitting with a measly market capitalisation of R100m with investors having exited the fund over the past few years. Tshabalala announced some months ago that Rebosis was in talks to sell its office portfolio for R3bn so that it could become a landlord which only owned retail assets. He spoke of these talks leading to a pending deal, for months.

Rebosis owns Baywest Shopping Centre in Port Elizabeth, Forest Hill in Centurion and Hemingways in East London. Ngebulana had wanted Rebosis to be a retail landlord in the vein of Hyprop Investments, owning high quality malls.

But the anticipated office sale is off for now until Rebosis finds another buyer. It announced this week that conditions precedent required the purchaser, Ulricraft “to obtain finance before it would be put to shareholders for approval by way of a circular”.

The latest deadline to fulfil this was on June 22 2022 after having been extended to allow the purchaser additional time.

“We believe the termination of these discussions is in the best interest of our shareholders. The management and board of Rebosis have been working on various short- and medium-term turn-around strategies for the group, in parallel with the disposal transaction,” said Kameel Keshav, non-executive chairman of Rebosis.

Rebosis’ board and management were considering options and would communicate a definitive structure and strategy on or about July 31 this year, according to Keshav.

Rebosis originally announced on October 21 2021 that it had entered into negotiations with Ulricraft for the “disposal of the majority of its commercial office properties for an aggregate cash consideration of R6.32bn”. But on March 25 2022, this amount was revised to R3.4bn for a reduced portion of the office portfolio, at a yield of 9.4%.

It appears that some of the offices were not up to a standard that Ulricraft expected or there may have been challenges such as a lack of occupancy certificates. Ulricraft may have struggled to find any funding at all.

Tshabalala said on Monday July 4 that Rebosis had to focus on balance sheet management.

“Our immediate priority is to reduce the group’s debt to below covenant levels, that will allow us to negotiate longer debt terms with our funders. This will move a considerable portion of debt from current liabilities to long-term liabilities and provide headroom on the balance sheet,” he said.

“As part of our strategy we have considered several viable options, including disposals. No asset across our portfolio is sacrosanct, however only offers at market related value will be considered”, said Tshabalala.

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