PIC appoints independent joint venture to dispose of 70 GEPF properties

The Public Investment Corporation (PIC) has announced a strategic decision to optimise the Government Employees Pension Fund (GEPF) property portfolio. It has identified about 70 assets that fall outside its investment criteria that it wants to dispose of in 2021, and has appointed a joint venture (JV) between JLL and the Empact Group to broker the sale of these properties in tranches.

The portfolio comprises mostly small and noncore assets. This is the first time the PIC has appointed commercial agents to broker the sale of GEPF properties to the private sector. These properties are investment grade and are made up of a basket of asset classes, which include retail, industrial and commercial, as well as specialised classes such as student housing, schools and data centres.

PIC CEO Abel Moffat Sithole says: “Optimising the portfolio now is a move in the right direction. As with all asset managers, portfolio optimisation through constant analysis and review of any investment portfolio is good business practice. We need to ensure stable returns for our clients, and therefore will be reinvesting the proceeds of the sales into further investment opportunities.

“To give confidence to investors participating in the sales process, we have appointed commercial property JV to oversee the sale of a portion of the portfolio. Our appointed agents will manage the entire process from marketing to deal closure. We specifically wanted to make this an external process to give the market confidence in the sales.”

The PIC followed a tender process to find the right partner to market the portfolio. JLL is the second-largest public brokerage firm globally, and is listed on the New York Stock Exchange. The Empact Group, wholly owned by Thebe Investment Corporation, has recently added Empact Corporate Real Estate Services (Cres) to manage the commercial property division of the business.

Sithole says, “The tender process was followed to find a truly professional partner, who displays world-class experience, to ensure transparency and compliance.” 

Excited about the new JV, Pepler Sandri from JLL Capital Markets says, “Performance of convenience and neighbourhood shopping centres and industrial assets are starting to improve, allowing for a certain amount of investment appetite for these types of assets. Because of this positive sentiment, now is a prime time for the JV to be offering such desirable retail and industrial portfolios to well-positioned investors.”

The JV has taken an interesting sales approach by using a new tech platform, SA Property Exchange, where the properties will be profiled, updated and sold online. 

Craig Hean from Empact Cres says: “This is an exciting first for the SA commercial property investment industry. Potential buyers and sellers will be able to load, view and even purchase the properties online. The back-end tech-build of this platform has been developed in the UK and has seen much success in that market.” 

“The innovative platform is backed by blockchain technology, and because of this, www.sapx.co holds a system of recording information that makes it difficult or impossible to change. It’s essentially a digital ledger of transactions that’s duplicated and distributed across a network. This is firmly in line with the tender requirements of transparency and compliance.” 

The portfolio will be sold in two separate tranches. The first phase of about 25 properties, comprising retail, industrial, and student housing, will be profiled on www.sapx.co in April. The next tranche of properties, which will be mostly commercial and specialised, will be released in July. 

For more information go to www.sapx.co. Deadline for registration of interest is May 7 2021.

This article was paid for by SAPX.