European boom is a real big boon for SA investors

Business

European boom is a real big boon for SA investors

There are real estate companies sitting on piles of cash with which they can reward South Africans

Alistair Anderson

South Africans invested in offshore-focused property companies should be rewarded in the next six to 12 months as market watchers are hoping merger and acquisition activity will gain momentum outside of SA.

While the SA economy struggles and consolidation among local funds looks unlikely, parts of Europe are booming. There is a bunch of mid-sized real estate companies which are listed on the JSE but which are focused on Western and Eastern Europe and are sitting on piles of cash. These funds can now give back to South Africans who took a chance on them when SA-focused funds were soaring and investors were spoilt for choice.

They can use their cash piles to buy other funds, gaining scale and diversifying. One potential player here is Sirius Real Estate, the owner of multi-let German business parks, an example of a company that travelled across the world in search of capital and eventually found it in SA where it listed at the end of 2014. The group has created an advanced in-house management system which is the envy of other companies that rent space to small and medium enterprises. Sirius is able to get that extra euro from each square metre of space, which its competitors just cannot match, says Brendon Hubbard, a portfolio manager at Clucas Gray...

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