Investec Capital Markets, a division of Investec Bank Limited, has successfully placed R450 million of secured notes for Investec Property Fund Limited.

The notes are secured by five commercial properties owned by the Fund and are listed on the Interest Rate Market of the Johannesburg Stock Exchange (JSE).

This forms the inaugural issue of Investec Property Fund’s R1 billion Domestic Medium Term Note (DMTN) Programme, which will see the issue of both secured and unsecured notes giving the Fund easy access to the capital markets as an alternative source of funding.

“The successful issue of these notes provides a very attractive source of debt financing and gives us the flexibility to continue our on-going growth and acquisition strategy,” says Sam Leon, chief executive officer of Investec Property Fund,

The notes are secured by five commercial properties owned by the Fund and are listed on the Interest Rate Market of the Johannesburg Stock Exchange (JSE).

Most of the properties, which are situated throughout South Africa, are single-tenanted but all have high credit quality tenants and long-term leases in place.

This initial set of notes issued through the DMTN Programme was placed with institutional investors through a Dutch auction and was 2.8 times over-subscribed, with bids of R1.2 billion having been received from asset managers.

Andrew Chananie, of Investec Capital Markets says they are delighted to have provided a flexible funding solution for Investec Property Fund, while meeting the needs of institutional investors.

He says it is a complete solution for all parties, which resulted in the competitive pricing being achieved.

The Investec Property Fund listed on the JSE in April 2011 and invests in direct real estate with the aim of growing its asset base to generate income returns for shareholders.

The Fund includes a spread of property assets in the office, retail and industrial sectors located primarily in Gauteng, but with good representation in the Western Cape and KwaZulu-Natal.

The focus is on building a quality portfolio underpinned by strong rental income and currently, it has a portfolio of 33 properties independently valued at R2.1 billion.