SCHRODER European Real Estate Investment Trust (Reit) has become the latest offshore property fund to list on the JSE, raising about R2.4bn in its initial public offering.
Schroder, which was established by multinational property group Schroder Real Estate, offers local investors exposure to European markets, which are expected to do well in the next year.
The Reit is the eighth property company to list on the stock exchange this year.
"The Schroder European Reit will offer investors liquid access to key continental European markets, focusing on investment into targeted growth cities.
"The initial placing has raised £107.5m …," the company said.
Schroder will invest up to 10% of the funds raised, or a maximum of £15m, in the fund. A fully covered dividend to shareholders of 5.5% per annum is targeted once the initial capital is fully invested and debt is drawn down.
The investment trust will have debt at a maximum level of 35% loan to value.
Debt-funding rates in continental Europe are currently offering an attractive spread to yields.
One analyst said Schroder would be a welcome addition to the JSE.
"I definitely see space for them, as Schroder is a very competent asset management company with an experienced management team and board based in the geographical area in which they invest.
"The company has a solid history and franchise in their home market and have an advantage over non-European specialists operating in their core markets," said Alternative Real Estate Capital Management fund manager Garreth Elston.
"They should be able to leverage their local experience to deliver good returns," he said.
A total of 23 companies have joined the JSE this year, with the real estate sector being by far the most active in terms of new listings.
