Old Mutual, one of the largest property owner in South Africa,
is planning to launch a ‘core’ unlisted property fund containing
its existing fixed property assets, which are evaluated for worth
R10bn.
Triangle Real Estate Fund, the newly formed fund will be introduced
shortly in the market by Old Mutual Property Investments. The
move envisages grabbing the attention of institutional pension
and retirement fund market. A major purpose to form the real estate
fund is to give a push to the growth of Old Mutual’s real estate
assets.
The company will use the proceedings as investments in more
property, says Colin Young, head of asset management at Old Mutual
Property Investments. The fund will comprise of three chief components
including direct property holdings, listed property holdings,
and cash. The exposure to direct property will be 85%. The medium
term targets at increasing the size of the fund to R25bn. The
life insurance giant also has plans to launch another real estate
funds under the Triangle brand.
One of these is Triangle Real Estate Development Fund. The new
fund is being developed to hold the development land holdings
of Old Mutual, which include the second phase of the Zones@Rosebank,
which will see development of R623m mixed use complex including
retail space, a 160 room hotel, a four level parking garage and
studio offices. Completed properties from the development fund
will move the ‘core’ fund upon completion.
The development fund targets investors who are showing large
interest in capital appreciation. The capital will be a higher
risk but will also show a high potential return than the ‘core’
fund. Old Mutual Property Investments is also setting a social
responsibility real estate fund to be called as Triangle Real
Estate SRI Fund to focus on direct real estate investments in
‘under – resourced areas’.
