Shares in international real estate firm Burstone jumped almost 8% on the JSE on Friday, after the company said it was in talks regarding the potential formation of a strategic partnership with funds advised by affiliates of Blackstone Europe.
In a statement on Friday, Burstone said that in response to the recent market speculation, shareholders were advised that it had “entered into exclusive negotiations regarding the potential formation of a strategic partnership with funds advised by affiliates of Blackstone Europe”.
The terms of the negotiations include the disposal by Burstone of a majority of its stake in its Pan-European Logistics portfolio to Blackstone.
At this stage there was no certainty that a transaction would be concluded and accordingly, shareholders were advised to exercise caution when dealing in Burstone’s securities until a further announcement was made, it said,
In May, Business Day reported that the group, which is valued at R6.2bn on the JSE, noted strong operational performances across its geographical businesses for the year to end-March, despite pressure from a persistently high interest-rate environment.
This comes as the real estate investment trust (Reit) previously known as Investec Property Fund successfully delivered on several of its strategic initiatives, repositioning from a property investment business into an integrated international real estate fund and asset management company.
The group reported distributable earnings per share for the year had increased 7.4% while operating profit jumped 10% to R1.3bn.
At the time the annual results were released, CEO Andrew Wooler said Burstone was benefiting from synergies created by the internalisation, integration of its business, and its enhanced international footprint. He said the results were underpinned by solid operational performances by the SA and European businesses, with like-for-like net operating income up 1.5% and 6.2% in euro, respectively.
“As we’ve transitioned into a fully integrated international real estate business, our team has delivered on what we set out to do,” said Wooler. “We are already seeing benefits of the internalisation and we believe our new structure has set us up to deliver on our capital-light strategy and to further expand our fund management strategies across all regions.”
Burstone develops and invests in local and international property assets. Having listed on the JSE in 2011, it operates in SA, select European markets and Australia.
Burstone’s shares closed 7.65% higher at R7.74 on Friday.
With Michelle Gumede
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