Executive Summary
South African Property Opportunities plc's strategy will be to generate attractive returns by targeting opportunities in the South African property market with a view to benefiting both from active portfolio management and underlying economic growth. The Directors and Investment Manager believe that South African commercial investment property offers attractive income yields against a backdrop of South Africa's solid macroeconomic fundamentals. At the same time, property development opportunities and returns are being driven by increasing urbanisation and the rapid emergence of a black middle class. The Company intends to invest primarily in the following manner: greenfield developments including large mixed-use sites targeted to meet the demands of increased urbanisation; brownfield redevelopments targeted mainly at providing housing and amenities for the emerging black middle class; provision of mezzanine finance to existing Investors and developers, which should provide access to immediate opportunities at attractive yields; and commercial investment property with attractive income yields. The Company may also invest in special situation corporate opportunities (whether listed or not) where potential is perceived to generate returns from underlying properties. Investments will be made throughout South Africa but concentrated in and around South Africa's economic hub, Gauteng. Investment elsewhere in Southern Africa may also be considered. The proceeds of the Placing are expected to be deployed within 18 months following Admission. The proportions to be made up of these different elements are likely to fluctuate according to market conditions and the availability of investment opportunities. The Investment Manager and the Directors understand the importance of Black Economic Empowerment and the transformation of the property sector in South Africa. To this end they have engaged the Strategic Adviser to facilitate the Company's participation in this important segment in the market. On an ongoing basis, the Investment Manager, assisted by the Investment Adviser, shall be responsible for managing and realising the investments and developments of the Company and its subsidiaries with a view to achieving optimum returns for the Company and its shareholders. The Company intends to maintain a diversified portfolio and no more than 20 per cent. of its assets will normally be invested in any single property. As well as approving transactions as appropriate, the Directors will review the Company's property portfolio on at least a quarterly basis and shall supervise the Investment Manager's adherence with the Company's investment objective and policies.
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