Capital Property Fund expresses interest acquiring SA Corporate assets

Capital has made proposals regarding the pricing of the envisaged acquisition and the basis on which the price would be settled by it, but it has not disclosed this to the market as negotiations were continuing.

SA Corporate Real Estate Fund yesterday confirmed that Capital Property Fund had expressed interest in acquiring all its assets for an undisclosed sum, in a deal that would nevertheless be a sizeable one in the listed property sector.

It plans to pay for the acquisition in cash and in units.

Capital management could not comment yesterday as the company was in a closed period.

Last week Capital said discussions between the parties had been scheduled to address these and other details of the envisaged acquisition.

SA Corporate yesterday confirmed that an unsolicited approach by way of an expression of interest letter had been received from Capital to acquire its assets. However, SA Corporate said at this stage no exclusivity had been granted nor had any agreement been reached.

Alternative Real Estate fund manager Maurice Shapiro said little information had been provided. "So one would not want to speculate. We have seen many mergers and new listings coming to the listed property sector over the last year. Each is different. Until a firm offer is made it would be a bit premature for investors to know if this is good for the sector," Mr Shapiro said.

He said SA Corporate had a great industrial property portfolio, but its retail portfolio was struggling. "Management have been aggressively spending, trying to improve the quality of their retail portfolio, which has hurt short-term earnings growth."

Capital’s portfolio was worth R17,4bn last year.

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