ATTFUND FEATURE

AT T F U N D & PA RKD EV

feature

standing Never

still

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Attfund and Parkdev FEATURE

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Continuing investment during recession can pay off immensely as Ian Armitage learns.

ecessions are periods full of fear: fear for the future, fear for jobs, fear of austerity, fear of tax hikes and fear of investment. However, a recession can actually be the perfect time to invest. The key is to start off with the right mentality and to not panic. Yes they are scary, but recessions also lay the groundwork for opportunities in the future – history teaches us that.

“I agree 100 percent,” says Louis Norval, a founder member and CE of Attfund. “There is a sound argument for businesses to continue investing through difficult periods.”

Attfund has done just that and invested in two massive extensions of premier shopping complexes at a time when most shopping malls and other projects had been put on hold, despite being due for completion when most recessionary pressures will have disappeared.

“I think our strategy will and is paying off,” says Norval. “The first of the two investments was at Clearwater Mall in the affluent northwestern suburbs of Johannesburg, where there is a rapidly expanding residential corridor. The other is Woodlands Boulevard an upmarket shopping destination in the trendy, vibrant quarter of Pretoria East.”

Clearwater Mall was expanded by 24,000 square metres and Woodlands Boulevard had another 29,000 square metres added. Both projects were completed in October 2010.

“Our belief was that it was the ideal time to undertake such expansions,” says Norval. “The cost of development was lower and there were several other benefits.

“The key is that as the economy continues its recovery, the extensions will be complete and both centres should be well positioned to take advantage of the upswing and as a result of their size and variety of tenants, be dominant in their respective catchment areas.”

Attfund was founded in 2002 with a portfolio worth R670 million, which, over the years, has grown to more than R9 billion. It’s a giant. “The fund was formed through the efforts of a group www.southafricamag.com

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Attfund and Parkdev FEATURE

Attfund is one of SA’s largest privately held property funds, with assets in excess of R9bn.

It owns amongst others the following sought after properties: Woodlands Boulevard, Gauteng, GLA 70,164sq m.

Centurion Mall (25 percent), Gauteng, GLA 109,420sq m.

Atterbury Value Mart, Gauteng, GLA 47,712sq m.

Garden Route Mall, Eastern Cape, GLA 53,557sq m.

Clearwater Mall, Gauteng, 85,197sq m.

CapeGate Precinct, Western Cape, GLA 106,127sq m.

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of individual professionals working together, each with specific expertise in essential fields,” says Norval. “The strategy adopted by Attfund has been to focus on a limited number of high value investments at the top end of the market and the key elements of our success are a well-defined business strategy and a formidable selection criteria.

“When we set out we wanted to focus on few – but high value –shopping centre and corporate office park investments in the upper income market.”

PARKDEV: PROPERTY ASSET MANAGEMENT KINGS As with all Attfund investments, Clearwater and Woodlands are managed by Parkdev, an asset and property management company with extensive expertise and systems to manage retail and commercial real estate.

“Attfund is a property investment vehicle and there are four major shareholders in Attfund,” says Norval, elaborating on the ownership structure of the fund. “You have the Atterbury Group and they own approximately

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“The Management and staff of the Ampair Group would like to congratulate the Atterburry Property Fund for their dynamic marketing and growth within the property industry, it has been a pleasure working with them in the past and we look forward to a long prosperous relationship”.

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Attfund and Parkdev FEATURE

43 percent of Attfund. Then my family trust owns approximately 28 percent. Then you have another partner, Neno Haasbroek, who owns about 4 percent. And then you have got a black empowerment group, which together with Nedbank holds 11 percent.

“The remaining 14 percent is held by approximately 220 shareholders,” he says.

Attfund doesn’t have any employees. The external management company in this case is Parkdev, which does both the asset and 6

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property management of the fund. “Our strength,” Norval continues, “lies in the fact that Parkdev only employs the best people in the industry, people that are very passionate in what they do and treat the investments as if their own.”

Interestingly, Attfund is in the process of preparing for listing on the JSE in 2011 and as part of that process it is “internalising” the Parkdev asset and property management contract. “Effectively, Parkdev will merge the

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Attfund and Parkdev FEATURE

asset and property management contract into Attfund,” says Norval. “As from 1 November, the asset management company and property management will be in house. It will be part of Attfund. It will be a change of strategy and we will restructure Attfund into two different entities: Attfund Retail Limited and Attfund International Limited.

“We are putting all the South African property assets in Attfund Retail and all the

ABOUT CLEARWATER The Clearwater shopping centre has been built as a 85,000 sq m double storey triangle, with an anchor tenant at each point of the triangle. The inner court is where cinema and dining entertainment facilities can be found and is

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Supercare Supercare’s relationship with Parkdev spans more than 6 years when Louis Norval awarded Supercare the cleaning contracts for Woodlands, Centurion and Clearwater Mall. The relationship developed rapidly and Supercare was awarded sole supplier status.

Over the years this unique partnership with Parkdev, driven

by Mareli Vorster, has enabled Supercare to research unique systems for shopping centres and affords them the freedom to continuously test new ideas on sites. This baton has been ably taken over by Brenda Frylinck of late. We wish Louis and his very capable team well for the future!

accessible via each leg of the triangle.

Although the winter climate in this region is sunny and dry, it does get very cold, thanks to its 1,500 metre-high altitude.

So to make the courtyard usable all year round, there is a retractable roof that

encloses the restaurant zone and brings it inside the mall. Named after a stream and waterfall at the nearby Kloofendal Nature Reserve, the newly expanded centre offers its patrons a wonderful combination of tenant mix and lifestyle experience.

Attfund and Parkdev FEATURE

ABOUT WOODLAND Woodlands Boulevard provides 70,000sq m of shopping and lifestyle entertainment, with over 160 tenants offering an upmarket shopping, dining and lifestyle destination. It is designed and positioned to be Pretoria’s upmarket fashion capital.

international and non-core investments into Attfund International.

“The intention is then for Attfund Retail to be listed on the JSE in some shape or form in the first quarter of next year.”

What is the motivation for that? “Generally, if you look worldwide, the trend is that where you have listed property funds, the preference from the shareholder perspective is to have an internally managed company,” Norval answers. “There is a school of thought who believe there could be a conflict between the asset manager and the investment company. The international trend is towards a completely internalised model. Hence we always undertook that, at listing, we would internalise the asset and property management. Neno Haasbroek, together 10

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with Mareli Vorster, Leon Howell and Susjan Wentzel and I are the shareholders in Parkdev.

“To date the primary function of Parkdev has been to act as the asset and property manager for Attfund,” Norval continues.

“Parkdev is selling the management contract to Attfund. Parkdev also, historically, owned 100 percent of the shares in Sycom Property Fund Managers (Pty) Ltd., which is the manager of Sycom Property Fund. Subsequently we have sold the shares in that company Acucap Properties.

“Parkdev also indirectly owns 26 percent in Capital & Regional Plc. and is the coasset manager for the 96,000 sq m Nova Eventis shopping centre in Germany, amongst other things.”

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Attfund and Parkdev FEATURE

So what will become of Parkdev? Well after internalising the Attfund contract, it will change significantly. It has already started to look at alternative investments and is moving in a very different direction. “Parkdev’s focus,” says Norval, “is moving away from being a pure asset management company to becoming an asset manager and investor. To that extent we are considering investments in various alternative industries.”

INTERNATIONAL FOOTPRINT As Norval suggested, there is more to Attfund than South Africa. It has witnessed a number of opportunities and has invested in like-minded businesses overseas, hedging operational and currency risks. The aim is to continue that and for Parkdev to do something similar. “To give you an example, Attfund took an interest in New York-listed Simon Group and later, a stake in Deutsche Euroshop, which focuses on quality shopping centres in Germany and neighbouring countries and is listed on the major German exchanges. In 2007, Attfund acquired 22.5 percent of Stenham European Shopping Centre Fund, which owns Nova Eventis shopping centre, one of Europe’s largest shopping malls in Leipzig, Germany.

“We have also set up a fund called Karoo Investment Fund. The Fund’s objective is to deliver attractive total returns from investment in Western European and North American real estate capital markets. The Fund focuses on significant investments in listed and unlisted property funds and has a portfolio with investments in the most attractive investment opportunities in its target markets.

“Parkdev indirectly co-manages Karoo Investment Fund,” Norval says.

The future, it seems, is bright for Attfund and the market is keenly anticipating the listing on the JSE. Parkdev is set for an exciting time as well; it is seeking to expand its asset management capabilities internationally and to find exiting new investments. END 12

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