THE BOTTOM LINE
Russian in where Raven dares to tread: are we bold enough?
London-listed group that invests in Russian commercial property will begin trading on the JSE next week
South Africans will soon be able to invest in Russian commercial property – but is it a good proposition given the myriad risks and lack of information about that market?
A company called Raven Property Group, which owns logistics warehouses in the world’s largest country by area, reckons it has a good investment case for South Africans and has announced it will inwardly list on the JSE on Monday.
The group has yet to approach institutional fund managers, so there is speculation it will try and grow its SA investor base gradually.
It says it has built up a strong profile thanks to a listing on the London Stock Exchange. The group has a a market capitalisation of £252m (R4.92bn).
But it is still hard to see how this company will attract South African institutions, considering that many of them have lost billions already due to the dramatic loss of value in the Resilient stable of companies, which have been at the centre of allegations around the trading of their shares. Understandably fund managers would be cautious about any new potential listings.
Garreth Elston, a fund manager at Reitway Global, says Raven offers exposure to one of the most volatile economies in Europe. He also says there is a lack of transparency about commercial real estate data in Russia and companies have to abide by US and EU sanctions.
But there may well be some interest from investors with some appetite for risk.
Raven says it offers choice for investors who want exposure to the Russian economy which grew 1.5% last year and which is expected to breach 2% in 2018.