Investec Property Fund
About the fund
Investec Property Fund Limited (IPF) is a South African Real Estate Investment Trust (REIT) that listed on the Johannesburg Stock Exchange (JSE) in 2011. The Fund pursues a bi-regional investment strategy, focused on building scale and relevance in its core geographies of South Africa and Western Europe. IPF’s investment portfolio is currently comprised of R22.4 billion of direct and indirect real estate investments located across both these regions.
In South Africa, the Fund directly owns a sizeable and diversified portfolio of 90 properties in the retail, industrial and office sectors valued at R15.2 billion and a 35% interest in Izandla valued at R0.3 billion c.44% of the Fund’s balance sheet is comprised of foreign investments, namely a 65% interest in a Pan-European logistics portfolio. This portfolio consists of 47 logistics properties that are located in the major logistics corridors of 7 European countries, including the core countries of Germany, France, and the Netherlands. This provides the Fund with geographic diversification and exposure to quality real estate in the developed markets of Western Europe. In both regions, the manager has a presence on-the-ground with in-country expertise and therefore adopts a hands-on approach to managing the properties.
The Fund aspires to be recognised as SA’s leading REIT, which entails owning the best-of-breed assets, providing the best customer experience and delivering the best sustainable returns to shareholders on a risk-adjusted basis. The Fund’s best-of-breed portfolio has been built based on adhering to its investment philosophy of acquiring quality assets with compelling property fundamentals in targeted sectors in selected geographies where it has in-country expertise. This philosophy is underpinned by the Fund’s purpose – to unlock the potential of space – to create sustainable value for all its stakeholders.
IPF is a company incorporated in South Africa with registration number 2008/011366/06, listed in the Real Estate Holdings and Development sector and obtained REIT status on 1 April 2013.
Bi-regional focus on core markets
The Fund pursues a bi-regional investment strategy, focused on building scale and relevance in its core geographies of South Africa and Western Europe. This streamlined portfolio, with investments focused in both high-growth, developed markets offshore as well as a quality, mature local portfolio, has allowed the Fund to generate returns throughout the cycles. This enables it to deliver on its objective to optimise capital and income returns over time for shareholders.
Though we achieved significant progress, we believe there’s room for improvement. We continue to focus on our four pillars as a key strategic priority.
Revenue security and growth
We aim to keep our vacancies low (they have decreased from 4.0% to 3.1%, excluding development vacancies). We invest ahead of time to secure our revenue stream. We create innovative solutions, tailored to our client needs.
Client service excellence
Our client service distinguishes IPF from other property funds. Our client engagement feedback strategy ensure that we address our client needs timeously to keep our service delivery relevant. We do this through a scoring mechanism which provides us with measurable and actionable objectives.
Value-add asset management and capital allocation
- With our relevant, efficient core offering, we:
- Make sure our level of service continues to set us apart
- Maintain efficient capital allocation
- Maximise long-term risk adjusted returns
- Increase offshore exposure to 20% (a core objective)
- Allocate up to 10% into ‘broken core’, value-add transactions and specialised assets.
Cost efficiency and system optimisation
In the current environment, our primary focus is on keeping our costs largely below inflation. We commit to spending to improve our client service and/or to enhance the safety and security of IPF’s offering. Our variable expenses have grown as we’ve increased our client incentives in this competitive environment.