The Oppenheimer family has spent half-a-billion rand on a stake in JSE-listed MAS Real Estate to gain exposure to Romania’s commercial real estate market as its looks to spread its wealth further across the world.
Romania is one of the fastest growing countries in central and Eastern Europe. In August its finance ministry said economic output was expected to contract 3.9% in 2020 due to the Covid economic lockdown, before rebounding as much as 4.9% in 2021.
MAS said on Sunday that the tranche of 41.7-million of its shares that sold on Friday for R500m was acquired for the benefit of Mary Oppenheimer’s family interests, under the guidance of adviser Stockdale Street.
Martin Slabbert, the CEO of MAS, said the off-market trade represented a seal of approval of the company’s long-term investment philosophy and was an endorsement of its pre-emptive handling of the Covid-19 pandemic.
MAS, which has a market capitalisation of R9.34bn, invests mostly in Romania, owning malls and offices across the country. The company was created in 2008 as an initiative of several large SA property investors and high-net-worth individuals who were keen to diversify their holdings into overseas markets.
In 2016 MAS formed a relationship with Prime Kapital, which was created by Slabbert and business partner Victor Semionov to obtain access to Prime’s development activities in central and Eastern Europe.
In November 2019 Slabbert became CEO of MAS and Semionov its CFO, with a three-year mandate to dispose of the company’s old assets in Western Europe in favour of higher return opportunities in central and Eastern Europe.
MAS and Prime Kapital’s development pipeline includes three residential projects. The MAS shares acquired by the Oppenheimers’ special purpose vehicle were bought from listed property group Attacq. Attacq owned 20.7% of MAS and will own 14.8% after the Oppenheimer deal.
Slabbert said the deal was “a validation of MAS’s strategic direction, including our broad strategy to divest from Western Europe for redeployment in [central and Eastern Europe], as well as the company’s sound handling of the pandemic”.
Despite the pandemic, long-term consumption growth in the region was expected to outperform Western Europe and MAS was well positioned to benefit from this, he said.
In December, MAS said private consumption in central and Eastern Europe had not contracted as significantly as initially expected “and it appears it will recover faster due to less stringent anti-pandemic restrictions and the anticipated relief provided by vaccination”.
This was not typical in the region, as Polish and Bulgarian non-essential retail trade restrictions were reintroduced in November and December respectively and were continuing to cause headaches for landlords and operators in those countries.
“Fortunately, MAS is predominantly invested in Romania, where our retail operations with a high proportion of value-orientated open-air malls have experienced limited restrictions since June 2020,” Slabbert said.
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