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Properties

  • Isibaya
  • Project Development Partnership Fund
  • PropertiesCurrently selected
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Properties

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[column 12 layout="default" class="text"]The Government Employees Pension Fund (GEPF), Unemployment Insurance Fund (UIF) and the Compensation Fund (CF) have given the PIC a mandate to invest in unlisted properties. Unlisted property investments are made in the following sectors: retail, office and industrial/specialized property assets.

Investments are made through directly acquiring property assets. Alternatively, investment are made through equity investments in unlisted property companies. Examples of such companies are Pareto Limited, which specialises in Regional Shopping Centres in Metropolitan areas; V&A Waterfront, which primarily focuses on the investment and development of the V&A Waterfront in Cape Town; Arch Property Fund, which is an owner and developer of mixed-use precincts in metropolitan areas; and ACSA which is the owner and manager of airports.

The PIC provides equity finance and facilitates debt funding for emerging developers in prospective developments.

Each investment opportunity is assessed in terms of the following criteria:

 
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Mandate Fit
Investment mandates restrict us to invest in one or a combination of retail, offices, industrial, student accommodation, mixed-use precincts underpinned by commercial properties.
Strategic Fit

Our current strategy is to undertake new developments due to their high developmental impact, e.g. job creation, enterprise development, etc. Consideration is given to buildings that are less than five years and underpinned by strong tenant covenants (long-term leases at market or above market rentals and escalations) in markets that are not saturated. For student accommodation, only new developments will be considered as the strategy is to increase supply of new beds.
Project Size
Minimum size for the retail properties is 10,000sqm; 5,000sqm for offices; 100 beds for student accommodation; and 5 000sqm for industrial properties.
Minimum Investment Amount
R100 million
Geographic Focus
South Africa and Rest of Africa. In South Africa, preference is given to previously under-serviced areas such as townships and rural areas.
Expected Returns
Equity
For equity investments, an ungeared internal rate of return of not less than 15% over a 10 year period. This return expectation is just guideline; the risks of each investment will be considered in order to assess return requirements. Investments with a higher risk profile may warrant a higher return and vice versa. For companies that have gearing, the loan to value of the company should not exceed 65%.

Debt
In cases where debt is sought, the property investment should demonstrate the ability to have sufficient capital growth over the life of the loan, such that the equity derived from the investment should be sufficient to pay off the debt on expiry of the loan.
Track Record
The applicant should demonstrate a level of experience in property development and/or investment or general entrepreneurial or corporate experience.
Environmental, Social and Governance (ESG)
Whilst our primary objective is to generate returns in line with our clients’ mandates, ESG principles are critical to our investment assessment. As such, we would assess whether the investment opportunity will create jobs, new enterprises and develop existing ones. We would further assess whether there is participation of women and youth; the use of green technology in the construction and management of the buildings; and good governance structures in investee companies.
 
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[column 4 margin-top="20px"]Applications for property funding can be sent to propertyfunding@pic.gov.za. Please click here for the application form.[/column] 
[column 4]Please click the button below to submit an enquiry or query related to Properties Investments
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[column 4]Please click the button below to submit a complaint related to Properties Investments
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