Freedom Property Fund recently listed on the JSE main board introducing its unique property capital growth proposition, derived substantially from residential property development, to investors.
The fund's diverse portfolio includes residential, commercial and industrial property assets of R1,56 billion. It has a strong focus on residential property development held for lease and serving the low- to mid-band of the market – a market segment that CEO of Freedom Property Fund Tyrone Govender notes is becoming significantly more attractive.
Govender says, “The market has responded very positively to news of Freedom’s listing. While our listing provides shareholders with the prospect of participating in a diverse portfolio of property assets, our strong weighting in the high-demand residential property development has attracted lots of attention.”
He adds, “Residential property development that is held for lease growing to become an increasingly hotly contested sector and gaining critical mass. Freedom is the first to take this concept to the JSE main board as a property capital growth fund. Because we are at the forefront of this growing opportunity, undoubtedly the market will be watching Freedom’s progress with interest. We are confident they will be encouraged by our performance.”
Freedom has an existing pipeline of R5 billion of residential property development within the fund, and Govender expects these opportunities to grow in the future.
And, Freedom’s JSE listing provides the platform to secure the capital and property expertise necessary to optimise the development of its property portfolio as well as unlock value and new opportunities.
When markets opened this morning, Freedom’s gearing was less than 3%, and its net asset value (NAV) per share around 35% greater than the issue price of a Freedom share.
“The discount that the listing share price represents creates unique market prospects,” says Govender. Freedom will unlock sustainable value and growth prospects for shareholders by capitalising on the largely ungeared value in our property portfolio. It will do this by securing reasonably-priced debt funding to develop a substantial portfolio of income-generating assets.
“Our listing cements Freedom’s considerable growth potential and ability to generate significant rental incomes,” says Govender. “It also creates access to the listed residential property industry for investors in South Africa. This has been extremely limited until now.”
Bringing Freedom to the JSE has been an exciting two-year journey. It began compiling its portfolio of investments and developments in 2012, targeting viable properties and projects with excellent prospects in areas with proven, sustainable demand. The vendors of these properties became Freedom's first investors.
“It has been an interesting, inspiring and positive road that Freedom has taken to our JSE listing today, and many incredible people have walked it with us. Our sincere appreciation goes to those who shared our vision from the start and who have been part of establishing this remarkable fund,” says Govender.
Freedom's assets comprise income-yielding properties and developments across the office, industrial and residential property sectors. Its yielding properties include Steelpoort Industrial Park in Limpopo, Wespark Palms in the Free State and Stellenbosch Industrial in the Western Cape. This is complemented by a secured pipeline of five commercial developments, nine residential rental property developments and two residential sale property developments, as well as a long-term development pipeline in decentralised areas throughout South Africa.