RMB Holdings Limited announces an extension of its investment strategy

Investment holding company RMH recently announced that it will expand its current, single investment in FirstRand to create a property investment business.

As a first step in the strategy of establishing a diversified portfolio of scalable entrepreneur-led businesses with proven track records in managing and building out property portfolios, the group announced its intention to make a 25.01 percent investment in South African property group, Atterbury. The only condition precedent remaining is Competition Commission approval.

Atterbury will become RMH’s key development partner in its core portfolio that will target the more traditional and larger areas of SA property – principally office, retail and industrial property. To supplement this core portfolio, the RMH property business will also include a specialist portfolio which will focus on niche areas of the property sector.

The RMH property strategy will focus on owner-managed businesses, a broader value chain in property, an unlisted portfolio, a balance between net asset value and yield, as well as a lower concentration risk as RMH will acquire stakes across multiple strategies, sub-sectors and geographies in time.

The group will follow a phased approach to acquire its various property investments.

RMH chief executive, Herman Bosman, says: “Our new property investment strategy meets our stated objective of creating shareholder value and also further diversifies RMH’s earnings base as we will invest across the breadth of the property value chain.

“In line with our history and ethos, we will focus on entrepreneurial and owner-managed businesses. The strategy will involve investing in physical property portfolios as well as vertically integrated property companies, specifically with internal management teams that offer asset management, development management and property management skills.

“As a first step in the realisation of our strategy, we have found a partner in Atterbury. It has a 22-year successful track record in entrepreneurial skills, as well as development and asset management ability. We will work with Atterbury and other future investment partners to help them with capital, strategic input, networking opportunities, structural longevity and additional governance systems.”

Atterbury chief executive, Louis van der Watt, says: “It was evident from the first meeting that Atterbury and RMH share a similar culture and value set. Atterbury has developed more than two million square metres of property inside and outside SA, we can assist RMH to capitalise on property opportunities.”

Recent Atterbury key developments include 300 000m2 of commercial, retail and industrial properties on the Waterfall land in Gauteng, including the flagship 130 000 m2 Mall of Africa that opened recently.

Although Atterbury is an unlisted entity, it has also played a significant role in two major transactions in the listed property sector. Atterbury was involved in the establishment of Attfund, which was reversed into Hyprop in 2011. The Attfund assets remain an important part of Hyprop’s current portfolio. Atterbury formed Attacq in 2005 and played an instrumental role in the successful listing of Attacq in 2013.

The financial effects of this transaction will be immaterial on the financial results of RMH over the short to medium term. RMH intends to fund its investment in Atterbury through preference share funding.

The conclusion of the investment into Atterbury is subject to approval by competition authorities.

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