Hermans & Roman Properties has announced plans to list on the real estate sector of the JSE in a move that will boost the black empowerment economic empowerment (BEE) wave in the commercial property industry.
The Cape Town based property investment and management entity will bring to the JSE an investment property portfolio valued at R3.5bn and assets under management valued at R8.5bn.
The rise of Hermans & Romans makes one of the few remarkable BEE stories in the commercial property industry. The group was established as a property management company in 2002 by two black property professionals Leslie Hermans and Kevin Roman. It came to challenge the tightly controlled and lily white property management sector. The little transformation that has occurred in this sector has mainly been via accommodation of black groups within established white firms. In starting their operation from scratch Hermans and Romans were the latter trend. Their operation grew incrementally over the past 10 years. The news that the operation was ready to enter the JSE means that it has come off age.
Hermans who serves as CEO described the listing prospect as an exciting step forward. “Over the last ten years we have built up HRPS into a substantial property management business and have managed real estate portfolios that the directors estimate to be worth in excess of R20 billion in aggregate. We have assembled a portfolio of high-quality, regionally-prominent and scarce prime properties offering stable, defensive cash flows and value creation potential. Our focus post-listing will be to grow the portfolio and deliver superior shareholder returns.”
On listing, the Company will own a portfolio of five large, high-quality retail and office as well as the property management business. The largest properties in the owned portfolio include Bedford Centre and Bedford Square, a state-of-the-art shopping centre located in Johannesburg. There is also Manda Hill, located in Lusaka, which is one of the largest retail properties in sub-Saharan Africa (excluding South Africa). The other properties comprise Langeberg Mall, a regionally -prominent shopping centre in Mossel Bay, H&R Technology Park, one of the largest mixed-use properties in the South Peninsula in Cape Town, and Liberty Towers, one of the larger office properties in Durban’s CBD.
Hermans said “One of the strengths of HRP is our exposure to the high growth economies of South Africa and sub-Saharan Africa as well as the growing retail market and higher-yielding office market. Our long-term vision is to build a focused real estate company comprising a limited number of large, primarily retail properties in growth markets in South Africa and selected other sub-Saharan African countries.”
He said the listing was intended to be implemented, together with a capital raising by the Company, through a private placement to qualifying investors only. The net proceeds of the offer will be used to fund growth