African Land could have been a good image for our kids

On Wednesday this week, we reported that the JSE was ‘robbed’. We said the Johannesburg bourse has been robbed of an opportunity to register a new property fund; a real estate investment trust (REIT); that is promising to emerge into an African retail property giant. We reported that the same applies to the Lusaka Stock Exchange (LuSE).

A sharp reader, who understood the figurative play of words in our report but nevertheless disapproved, responded saying the ‘word play’ was in bad taste and misleading.

This came after South African property giants Hyprop Investments and Attacq announced that they have reached an agreement to acquire African Land Investments for about R900 million. Before this, African Land Investments, which owns the Manda Hill Shopping Centre in Lusaka, Zambia, was talking about listing on the JSE and LuSE. In their announcement, Hyprop and Attacq said “As a result (of the Hyprop/Attacq proposed acquisition), African Land will not proceed with its proposed listing on the JSE or LuSE.”

Granted, and as we reported, both Hyprop and Attacq are listed on the JSE. As such the JSE will not necessarily be complaining.

We insist; the JSE was robbed. The South African public, the broader African continent, the entire world stands to be denied what could have been a good business show. That is not to say the Hyprop/Attacq move is a bad business deal. To be sure, this is a commercially sensible deal.  Kevin Teeroovengadum, the CEO of African Land Investments, does not have to reinvent the wheel. He will have access to established systems in driving the ambition of developing African Land Investments into a well-oiled continent wide property machine. The cocktail of skills made by the collaboration of Hyprop, Attacq, Atterbury Africa and African Land Investments in this deal makes for a deadly property development machine that can be matched by a few across the globe.

So, where is the ‘robbery’?

We were watching the development of African Land Investments which was established early this year with great interest and for our well established eye for political economy angles. We looked at African Land Investments not only as a commercial vehicle but also as a potentially powerful beamer of a critical social message.

But wait; even the investment angle has a sour side to it. The listing of African Land Investments on the JSE and LuSE could have benefited diversity of assets available on these exchanges. Few people will argue with the proposition that the more independent investment vehicles you have on these exchanges, the better for all stakeholders and for risk considerations. Some readers will say, coming with a single asset in form of the 44000sqm Manda Hill Shopping Centre in Lusaka, African Land Investments would have been too small to matter. That is the point. Too small to matter makes for too big a space to dazzle.

In the now defunct listing prospectus, African Land Investments was promising growth of the assets to more than $1 billion over the next five years.  “The company’s medium-term objective is to grow its investment portfolio by acquiring quality retail, office, light industrial and mixed use properties in key sub-Saharan African jurisdictions, initially including Angola, Ghana, Kenya, Mozambique, Nigeria and Zambia, as well as selected countries in Francophone Africa, such as Senegal.” We divert!

The ‘robbery’ we speak of is more of a ‘soft’ but critical chapter of political economy of the African continent. Coming from South Africa we crave for a social rhythm that was promised by an independent and separately listed African Land Investments. We note that the Hyprop/Attacq announcement said African Land Investments will continue as a separate entity. In our view this is far cry from having Thamsanqa Sokutu and Kevin Teeroovengadum stand as a chairperson and CEO respectively of a JSE/LuSE listed company. The African Land Investments board also featured, Ken Reynolds a South African, Mark Mario di Pasquale a South African, Dominic Kwame Adu a Ghanaian, Zaid Ghoul a Jordanian, Ahmer Naushad a Canadian, Fungai Ruwende a Zimbabwean and Roddy McKean a British.

The fact that this team and its attendant socio-political dynamics is not headed for the JSE may not have implications in rands and cents but it would have meant a lot for symbols of power beamed out from the JSE. We crave for the establishment of powerful cultural symbols, from the business world, that will beam to our kids, self-affirmative social messages. The African Land Investments board paraded in the listing prospectus would have advanced this mission more effectively from One Exchange Square, Gwen Lane, Sandown, 2196.

We are mourning the death of what could have been.

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