London Stock Exchange-listed Raven Property Group on Monday announced plans for a secondary inward listing on September 10, which will make it the JSE’s first Russian-focused property listing.

The company is one of the largest logistics warehouse owners in Russia and has a market cap on the London Stock Exchange of £252m. The company trades at a dividend yield of close to 10%. About half of Raven’s rental income is earned in US dollars and the other half in Russian rouble, but dividends are paid in sterling.

Raven CEO Glyn Hirsch told Business Day the listing should appeal to SA investors seeking currency and geographical diversification. "We offer exposure to a specialist sector in a country where there are huge barriers to entry and an undersupply of stock," he said.

Hirsch said the Russian economic recovery has gained momentum this year following two years of contraction in 2014-2015 caused by a sharp drop in oil prices. Improved economic conditions have already translated into increased demand for warehouses, with Raven’s vacancy dropping from 19% to 13% in the six months ending June.

International consultancy Capital Economics has forecast GDP growth of 2.3% for Russia in 2018, up from 1.5% in 2017. The country’s unemployment rate earlier this year dipped below 5%, a level last seen at the time of the Soviet Union’s collapse in the early 1990s.

Raven’s listing will bring the number of JSE-listed property counters that generate 100% of their earnings outside of SA to 18. It remains to be seen how much appetite there will be among SA investors for Raven scrip. Craig Smith, head of research at Anchor Stockbrokers, believes there is still interest in offshore property listings that offer pure exposure to a specific country and sector.

"However, Russian real estate dynamics are probably not that well understood among SA investors. Therefore my expectation is that there is likely to be subdued demand initially," said Smith.