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Investors are concerned that Delta Property Fund will miss out on an empowerment deal that would reinvigorate the broad-based black economic empowerment fund that has had to navigate numerous headwinds over the past few years. Delta, which owns a number of state-tenanted assets, announced in May 2017 that a women-led consortium funded by the Public Investment Corporation (PIC) would invest R5bn in the group, but this has not come to fruition. The investment was meant to enhance Delta’s market capitalisation, which is about R4.14bn. Nesi Chetty, head of property at MMI Investments, said on the sidelines of the South African Property Owner’s Association national conference that Delta’s shares had been expected to rerate but the black economic empowerment deal that would drive this was overdue. Delta was trading at a yield of close to 17%, one of the highest yields in the sector. The stock is trading at a discount of more than 40% to net asset value. Due diligence It is understood that...

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