In a move that will see it expand beyond its current single investment in banking group, FirstRand, Rand Merchant Bank Holdings (RMH) plans to buy a 25.01% stake in local property group, Atterbury.
This is the first step in a strategy to invest in entrepreneur-led property businesses, RMH said in a statement on Tuesday.
In line with the group’s 29-year track record and ethos of building businesses from the ground up, the RMH property strategy will focus on owner-managed businesses.
“RMH will assist these players with capital, strategic input, networking opportunities, structural longevity and additional governance systems,” it said in a stock exchange filing.
Atterbury will be RMH’s key partner in developing its core property portfolio targeting office, retail and industrial property. Beyond the traditional areas of South African property, the RMH property business will include a specialist portfolio focusing on niche areas of the property sector.
“The strategy will involve investing in physical property portfolios as well as vertically integrated property companies, specifically with internal management teams that offer asset management, development management and property management skills,” explained RMH CEO, Herman Bosman.
RMH will focus on acquiring an unlisted property portfolio across sub-sectors and geographies, it said.
Established in 1994, Atterbury is led by co-founder Louis van der Watt and boasts property development and asset management services in multiple jurisdictions.
The property company is unlisted but played a significant role in two major transactions in the listed property sector, including the establishment of the Attfund, which was reversed into Hyprop in 2011, as well as the formation and later listing of Attacq.
Recent property developments by the group include 300 000 square meters of commercial, retail and industrial properties on the Waterfall land in Gauteng, home to the 130 000 square-meter Mall of Africa, which opened last week to significant hype on social media, crowds of shoppers and unbearable traffic.
The RMH/Atterbury transaction is subject to approval from the Competition Commission.
“The financial effects of this transaction will be immaterial on the financial results of RMH over the short to medium term. RMH intends to fund its investment into Atterbury via preference share funding,” RMH said.
Founded by GT Ferreira, Paul Harris and Laurie Dippenaar in 1987, RMH holds a 34% stake in FirstRand.
RMH had given up 3.48% in mid-morning trade, as banks and financials traded weaker.
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