Wiese-backed Tradehold becomes a pure property play
Investment group has unbundled its financial services and energy business interests
Tradehold, the investment group supported by billionaire Christo Wiese, has restructured itself into a property company with an unusual mix of UK, South African and Namibian assets.
Joint CEO Friedrich Esterhuyse said the company that has invested in more than R14bn worth of property can now pay dividends regularly and offer shareholders exposure to a defensive mix of UK commercial properties and a strong portfolio of industrial properties in SA and Namibia.
Commenting on the company’s financial results for the six months to August, Esterhuyse said Tradehold is repositioned as a dedicated property business after unbundling its financial services and solar energy business interests to shareholders and listing these separately on the AltX as Mettle Investments.
“We have transformed Tradehold from a complex structured company into something far simpler. This is now a company with primarily South African industrial assets which are performing very well and have locked long leases and UK assets which are quite defensive and offer capital growth opportunities. They fall under a variety of property types,” Esterhuyse said.
At the end of the reporting period, 40% of its Tradehold’s property interests were in the UK, 52% in SA and Namibia, and the remaining 8% elsewhere in Southern Africa.
Over the six months, the company’s net asset value per share, which its board said is the firm’s “measure of performance”, came to 119p, compared with 127p in the corresponding six months to August 2017, if the unbundled financial services are excluded.
This represents a large discount to the company’s share price, which trades at about R12.50 a share.
“The discount relates largely to the UK portfolio. When you buy a Tradehold share, you are essentially buying the SA portfolio and getting the UK exposure as a bonus,” Esterhuyse said.
Commercial UK property is facing negative sentiment as uncertainty around the Brexit process persists. Some shopping centres are also competing with online retailers.
Tradehold’s largest investor and chair is Christo Wiese, who owns 48% of the group through various business structures. He has spent the past few years helping the company grow its UK exposure through its subsidiary, Moorgarth, to 23 properties.
Esterhuyse said Moorgarth, which contributed 48.2p to the total net asset value per share, experienced a tough six months especially in terms of letting.