The market is clearly impressed by Spear Reit’s growth story, judging by the significantly oversubscribed capital raise concluded by the company last week. Management, led by CEO Mike Flax, received bids for R528m, nearly double the R280m the company had hoped to raise. That’s no easy feat, given fund managers’ renewed preference for offshore property stocks. The trend is underscored by the fact that most of the R11bn (Stanlib figures) raised by the listed property sector in the year to date through rights offers and private placements has gone to offshore counters. Spear’s capital raise will help fund recent acquisitions worth about R1bn, which include two landmark properties in Cape Town’s CBD: the five-star 15 on Orange Hotel and 2 Long Street, a historic office block on the Foreshore. Spear’s bagging of 15 On Orange was quite a coup, considering it paid only R298m against the R750m it cost to build the hotel in 2008/2009. Most of Spear’s other hotel, office, retail and industria...

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