Rand Merchant Bank Holdings (RMH), which is now property-focused after unbundling its FirstRand holding, says it is still grappling with a glut in SA's property market, which could delay plans to unlock value for shareholders.
Releasing its results for the nine months to end-March, RMH said it was too soon to tell if confidence was returning even after a “meaningful recovery” for SA’s battered property stocks, with many companies still prioritising debt reduction through asset sales.
The group has said it wants to unlock value for shareholders from RMH Property, including possible separate listings or disposals, but has warned that market conditions could delay this..
In June 2020, RMH unbundled its 34.1% stake in FirstRand, unlocking R5.4bn in value for shareholders, leaving it with RMH Property as its most valuable asset, which has exposure to SA, Namibia, Mauritius, Serbia, Romania and Cyprus.
A stronger rand weighed on the value of its portfolio in the nine months to end-March, whose value declined 6% to R2.58bn from June 2020. This excludes the effects of a loan related to a development opportunity in Bucharest, Romania, which ultimately did not proceed.
A stronger rand resulted in a decrease in the net asset value of R243m in the nine-months to end-March while, in the prior year it contributed R382m.
RMH has changed its reporting period to better align with its investee companies. The loss after tax from continuing operations improved by 80% to a loss of R72m for the nine months ended March, with the biggest effect from finance costs, as the FirstRand unbundling settled its debt.
RMH’s insurance interests, including Discovery, Momentum Metropolitan and Outsurance, were separately listed as RMI Holdings in 2011.
Covid-19 put huge pressure on landlords globally as traffic to bricks-and-mortar stores fell off, while many offered tenants discounts to see them through the worst of the pandemic.
The JSE’s Reit index has recovered 16.37% so far in 2021 compared to a 10.77% gain for the JSE all share. The Reit index, has, however, still fallen about 36% since the beginning of 2020.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.