RMB Holdings (RMH) will be expanding its investment strategy to include a property investment business, Africa Global Funds has learned.

RMH said its first investment will be a 25.01% equity stake in South African property group, Atterbury.

RMH intends to fund its investment into Atterbury via preference share funding.

The successful conclusion of the investment into Atterbury is subject to approval by competition authorities.

Atterbury has a 22-year successful track record in entrepreneurial property skills, as well as development and asset management ability.

The Atterbury team is regarded as one of the most innovative players in the South African property market.

“Having developed more than two million square meters both inside and outside of South Africa, Atterbury is the ideal partner for RMH to capitalize on property opportunities,” RMH said.

The 130,000 square meters Mall of Africa that opened on April 28, 2016 and the already developed 300 000 square meters of commercial, retail and industrial properties on the Waterfall land, are examples of developments successfully completed by Atterbury.

Although Atterbury is an unlisted entity, it has also played a significant role in two major transactions in the listed property sector.

Atterbury was involved in the establishment of Attfund that was reversed into Hyprop Investments (Hyprop) in 2011.

The Attfund assets remain an important part of Hyprop’s current portfolio.

Atterbury formed Attacq in 2005 and played an instrumental role in the successful listing of Attacq in 2013.

RMH will provide capital commitment and long term focus to expand Atterbury and assist in executing on its development pipeline and broader growth ambitions.

Since the unbundling of its insurance investments into Rand Merchant Investment Holdings Limited (RMI) in 2011, RMH has been a focused investment holding company with the only investment being its 34% stake in FirstRand Limited, a diversified banking group.

As communicated to the market, the board continuously evaluates the selective diversification of the RMH portfolio into investments complementary to its banking interest while retaining the flexibility of the RMH structure.

The board believes that the property investment strategy meets RMH’s stated objective of creating shareholder value.

“It will also diversify RMH’s earnings base as it will invest across the breadth of the property value chain.

In keeping with the group's history and ethos, the focus will be on entrepreneurial and owner-managed businesses,” RMH said in a letter to shareholders.

The strategy will involve investing in physical property portfolios as well as vertically integrated property companies, specifically with internal management teams that offer asset management, development management and property management skills.

“The property strategy will create a diversified portfolio of superior and scalable entrepreneurled businesses with proven track records in managing and building out property portfolios. RMH will follow a phased approach to acquire its various property investments. RMH will assist these players with capital, strategic input, networking opportunities, structural longevity and additional governance systems,” RMH said.

The RMH property investment case will be characterised by owner-managed businesses, a broader value chain in property, the unlisted nature of the portfolio, a balance between net asset value and yield, as well as a lower concentration risk as RMH will acquire stakes across multiple strategies, sub-sectors and geographies in time.

The RMH property initiative will revolve around a core portfolio with one key development partner.

“This anchor investment will target the more traditional and larger areas of South African property (principally office, retail and industrial property). The initiative will also include a specialist portfolio which will focus on niche areas of the property sector,” RMH said.