Inner city property company Divercity Urban plans to invest R3bn in SA’s urban centres.
The unlisted company, which is owned by Atterbury and Ithemba Property and has assets worth R2bn, is also eyeing a listing on the JSE in the next three to four years.
Its property development pipeline includes more than 3,000 affordable residential units and office and retail space.
Wouter de Vos, CEO of Atterbury Property Fund, said the fund would own R6bn in assets over the next three to four years and then list as a real estate investment trust on the JSE.
"By clustering investment properties in specific precincts, not only does Divercity benefit from management efficiencies, but it also enjoys better control of assets by enhancing the intrinsic value around each of its core real estate investments," De Vos said.
According to De Vos, Divercity was "creating large-scale, mixed-use, mixed-income urban renewal precincts. In this way, it [the company] also creates the density and scale to have a real impact on the cityscape"
Evan Robins of Old Mutual Investment Group said the days of property funds with market capitalisations of less then R2bn may be over.
Instead, those seeking listings on the JSE needed to be valued at R4bn and higher and have liquidity to attract investors.
Divercity’s initial portfolio includes buildings hand-picked from Atterbury’s, Ithemba’s and Talis Property Fund’s portfolios. Talis played a large role in forming the fund.
The properties include the Newtown Junction Mall, Talis House and Turbine Hall in Johannesburg. The company also owns the iconic Pan Africa Mall in Alexandra.
Divercity also owns 4,500 residential properties that were invested from the Ithemba stable. The company has acquired properties in Maboneng from Propertuity, and owns Sterland Mall in Pretoria.
Divercity had set its sights on adding more hospitals, clinics, schools, retail and leisure properties to its precincts, De Vos said.
According to the company, RMH Property and Nedbank Property Partners have expressed interest in contributing to the fund.