Investment strategy and process
Strategy:
SAPRO invests primarily in:
- "greenfield" developments including large mixed-use sites targeted to meet the demands of increased urbanisation;
- "residential" developments targeted mainly at providing housing and amenities for the emerging middle class.
Investments have initially been focused around South Africa's economic hub, Gauteng, but also cover KwaZulu Natal (Durban). Further, SAPRO is now investigating opportunities in the Cape.
SAPRO may also invest in special situation corporate opportunities where potential is perceived to generate returns from underlying property portfolios.
Process:
The Proteus Property group is responsible for identifying new investment opportunities that fall within the investment objective and policies of SAPRO. Proteus is a 60% subsidiary of Principle Capital, and is a joint venture with the local team and Masazane Capital.
Following the identification of a potential new investment opportunity, the local team, in conjunction with external advisers and partners as appropriate, is tasked with preparing a detailed feasibility study which aims to validate the quality and suitability of the opportunity. Should that team recommend the opportunity, the feasibility study and recommendation are presented to the Proteus Board for an "in-principle" decision on whether to proceed with the investment on behalf of SAPRO.
Once approved, Proteus will recommend the investment to the Board of SAPRO and, in certain circumstances, final SAPRO Board approval is required.
On an ongoing basis, Proteus is responsible for managing and realising the investments and developments of SAPRO and its subsidiaries with a view to achieving optimum returns for them and SAPRO's Shareholders. SAPRO intends to maintain a diversified portfolio and no more than 20 per cent. of its net assets will normally be invested in any single property.
As well as approving transactions as appropriate, the SAPRO Directors will review SAPRO's property portfolio on at least a quarterly basis and supervise Proteus' adherence to SAPRO's investment objective and policies.
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