Thursday, 20 July 2017 22:07

Trematon Capital Investments diversifies portfolio with investment in UK Real Estate Private Equity Market

Written by
Rate this item
(0 votes)

JSE listed Trematon Capital Investments Limited, the Western Cape focused actively managed Investment Holding Company, today announced that it has invested in the UK real estate market via ASK Partners (ASK), a boutique real estate private equity start up, based in London.

Arnold_Shapiro_Trematon

ASK operates in the private equity and lending space and specialises in sourcing funding solutions for residential and commercial developers in London. The executive team and founders of ASK have extensive experience in the origination and structuring of real estate debt and equity transactions. They have built relationships with many credible developers in London which have a short-term need for bridging or development finance.

The current state of the market for development lending in the UK has created an opportunity for non-bank primary and secondary lending to developers with excellent risk-adjusted returns.

Trematon Chief Executive, Arnold Shapiro commented: “This transaction marks our first investment offshore for several years. Following Brexit the real estate climate in the UK has presented us with a window of opportunity.

This investment meets our return criteria and provides currency diversification where we have existing skills from a local context.

Trematon now has direct access to deal flow in a very specific niche, as well as a platform to gain London specific property and due diligence expertise, creating an avenue for future investment.”

Trematon has made an initial equity contribution of £4.3 million. This represents a 40% shareholding in the Investment Company and an effective 20% shareholding in the Management Company. Trematon, has board and investment committee representation for both the Investment Company and the Management Company.

The total investment will be used to underwrite loans provided by ASK to developers at an interest rate that meets the risk criteria of each investment.

ASK, which is based and managed in the UK, has the responsibility of structuring the transactions, underwriting the loans and syndicating the investment.

To allow for the efficient recycling of capital, the loan transactions will be refinanced via a syndication process managed by ASK, whereby 90% of the loan value will be syndicated to high net worth individuals and 10% will be retained by the Investment Partners. Trematon will assist in syndicating loans to high net worth South African individuals, if required. Following syndication, the Investment Company will have generated a return in pound sterling terms in excess of Trematon’s minimum required return and the original investment will be recycled to finance future secured property loans and developments. 

The fundamental decision to invest is based on the returns achievable in pound sterling and no depreciation in the rand is assumed, if the rand strengthens the returns may be more muted but over time the currency diversification should be positive for the group.

Last modified on Friday, 21 July 2017 09:49

Most Popular

The Property Practitioners Bill set to transform the entire property market

Sep 19, 2017
Storme Heath CAF2
Gazetted in March 2017 for comment, the long-awaited Property Practitioners Bill is…

Ballito Junction Regional Mall is crowned the best new shopping centre in South Africa

Sep 22, 2017
Aerial image of Ballito Junction
Ballito Junction Regional Mall has been named the best new shopping centre development in…

Jones Lang LaSalle South Africa 2017Q2 reports reveal useful trends on industrial, office and retail property sectors

Sep 21, 2017
Christian Ulbrich
Real estate consulting firm, JLL South Africa, has released its Q2 2017 research reports…

Rode & Associates says Capitalization rates are now firmly on a rising path

Sep 22, 2017
Johan Hattingh
Property, whether directly held or listed, was the darling of South African investors…

ADvTech Properties to expand asset base to R6bn by 2022

Sep 26, 2017
Vongani Mbhokota
The properties division of JSE-listed ADvTECH, Africa’s leading private education…