Tower Property Fund holding its head high at home and overseas
Tower Property Fund has carefully positioned itself as a well-managed property group with attractive offshore and local components. Initially, when it entered Croatia, it faced heavy criticism, as there were concerns that it would be unable to succeed in a market about which it had limited knowledge. Many SA property companies have taken a chance in Central and Eastern Europe in the past two years. They are able to borrow at about 2% and buy properties at an 8% yield. In SA, borrowing costs are about 10.5% for a similar yield. The SA assets are in big cities, primarily Johannesburg and Cape Town. For now, Tower’s offshore assets will be solely in Croatia. Tower’s CEO Marc Edwards says these assets will be ring fenced. This could be as a subsidiary or a separately listed entity. “The risk on our Croatian properties is low as we have secured long-term head leases from the sellers,” he says. In its results for the half year to November Tower said it had acquired a R1bn retail property ...
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