Liberty Holdings announced its intention to list a portion of its premium property portfolio on the JSE as a real estate investment trust (REIT), to be called Liberty Two Degrees before the end of 2016.
In this historic listing for the property sector on the JSE, Liberty is looking to raise up to R4 billion in new capital at listing. This will enable Liberty to continue to invest and grow this portfolio to the benefit of its policyholders and other investors.
Liberty will also offer existing policyholders an exclusive opportunity to switch up to R3 billion of their current direct property holding into a new property portfolio that will invest in the listed entity. The REIT will have the ability to borrow and raise equity to create further growth opportunities and enhance returns for its shareholders. Liberty Two Degrees will be managed by the same team within STANLIB that has managed the Liberty Property Portfolio for many years under the leadership of Amelia Beattie as the CEO.
On a successful listing of the REIT on the JSE, Liberty expects the Liberty Property Portfolio to increase in value by between 3 and 5%. This should lead to a direct increase in the amount held by policyholders.
The JSE listing of our prestigious property portfolio will enhance the value proposition to Liberty’s customers and further improve the returns profile of this premier portfolio of properties,” said Thabo Dloti, group chief executive of Liberty Holdings.
“The capital raise will enable Liberty to expand and enhance its existing portfolio of quality property assets in South Africa and sub-Saharan Africa, gain access to a far wider investor community, and significantly add to the dynamics of the listed property sector of the JSE,” he adds.
The initiative further enhances Liberty’s reputation in property investment and demonstrates their ability to innovate and create an exciting investment opportunity for our customers and investor community at large.
Although Liberty Two Degrees will issue shares only to institutional investors on listing, Liberty has crafted an exclusive opportunity for its retail customers and financial advisers, by creating a new property portfolio, the Liberty real estate portfolio, which will invest solely in shares of the listed Liberty Two Degrees. Policyholders currently invested in the Liberty property portfolio can switch into the new portfolio on a limited basis, and those that elect to do so before the REIT lists will get preferential terms. This new portfolio, with returns driven by the Liberty REIT shares, enhances its customer value proposition.
It is important to note that the existing Liberty Property Portfolio that has been core to Liberty’s property offering for many years remains unchanged. For those customers preferring a more stable, lower risk return they will have the option to remain and the listing is subject to all the necessary regulatory approvals being received.