Oasis goes for the Cape

CAPE TOWN's top ranked asset management company Oasis has caused quite a stir with the launch of its new Crescent Property Fund – which comes with a Sharia compliant mandate.

This unique property fund is based entirely in Cape Town.

Readers will agree that building a high yielding property portfolio is a tricky business – but when your property selection is limited to buildings NOT housing gambling, bottle stores or interest paying/charging financial institutions then you really have your work cut out.

Basically Oasis, which specialises in assembling investment portfolios for Muslim clients, has a range of Crescent funds that are Sharia compliant.

Sharia compliant means the underlying investments are ethically sound – ie no liquor, pornography, gambling and so on.

The Oasis Crescent Property Fund is small compared to Cape compatriots like Spearhead, Atlas, CBS and Paramount – with a market capitalization of R200m.

To date only R115m is invested in buildings with R85m available for new investments (possibly outside Cape Town).

So where did Oasis find its handful of investment properties?

The group, normally reticent about revealing its underlying assets (for competitive reasons), indicates that 40% of the portfolio is located in Cape Town's CBD, 20% in Epping, 18% in Bellville, 13% in Goodwood and 9% in Milnerton.

The make-up of the property portfolio is 52% industrial, 29% commercial and 19% retail.

While information about individual properties is scarce, CBN knows that not long ago Oasis snapped up two industrial properties in Epping for R21m each.

One property was a 20 842sq m warehouse in Moorsom Avenue in Epping (occupied by Seyfert Corrugated and the Coricraft factory), and the other was is a 20 212sq m warehouse in Sacks Circle (tenanted by Carnoud Metal Box factory and Rennies Cargo Terminals).

More recently Oasis managed to secure the old Protea Life building on Greenmarket Square, replete with a new five year lease from mainly government tenants.

Oasis says more than 75% of the rental stream comprises high quality national or government tenants and more than 77% of rentals represent long term leases that only expire after 2008.

Oasis has managed to rank well in its Sharia investment mandates in equities both locally and internationally since the company's launch in the late nineties.

Whether it can achieve the same success with a relatively small (and restricted) property fund remains to be seen.

But Oasis' decision to launch a property fund at this juncture says a lot about the upside potential of the Western Cape industrial and commercial properties.

Source: Cape Business News - www.cbn.co.za