JSE gains yet another Reit as Castleview Property Fund lists

The Johannesburg Stock Exchange (JSE) on Thursday gained another real estate investment trust (Reit) under its AltX board, when Castleview Property Fund listed on its Retail Reits sector

Castleview is now the twentieth company to list on the JSE this year.

JSE capital markets director Donna Nemer noted that the introduction of Reits has not only brought South Africa in line with international best practice, but also helped to stimulate further growth and investor interest in listed property. “Over the past decade listed property companies have raised nearly R220-billion in capital on the JSE and the exchange is proud to provide a platform for growth yet another player in this vibrant sector.”

The Reit structure, which was introduced on the JSE in 2013, gives property companies enhanced tax efficiency as tax is payable by the end investor. Reits must also pay at least 75% of their taxable earnings available for distribution out to investors as dividends, which gives investors certainty that net income will be paid out them. Shares in listed Reitss can also be traded quickly and easily, while direct investment in property can be much less liquid.

Castleview is a property holding and investment company that is invested in the Pier 14 shopping centre in Port Elizabeth, a well-located regional shopping centre in the Eastern Cape. Castleview’s strategy is to invest in a diversified portfolio of retail properties in South Africa, providing exposure to consumers from a cross-section of income categories.

Castleview CEO James Templeton said he was excited about the prospects for the company and its ability to create a leading retail fund. “The retail property sector has been one of the outperformers in the South African market for a number of years, with government grants underpinning consumer spending, notwithstanding tougher economic conditions. Castleview’s growth strategy will focus on net asset value and total return on investment, for which a growing net asset value and healthy income stream is required and we aim to build a portfolio anchored by high quality national tenants with long term leases, generating escalating turnover for the company.”

Today’s listing brings the total number of Reits listed on the JSE to 38. These companies have a total market capitalisation of R524-billion, constituting 3% of the JSE’s total market capitalisation.