JSE-listed Burstone Group has established its first South African funds management platform as part of its ongoing transformation into a diversified, capital-efficient international real estate investment and funds management business.
The new platform, the SA Core Plus platform, will be seeded by Burstone, formerly known as Investec Property Fund, with a portfolio of 14 South African retail and industrial assets, comprising five dominant retail centres and nine industrial and logistics properties, with a combined asset value of about R5.4bn and a blended asset yield of 8.4%.
Nedbank Property Partners (NPP), a real estate-focused equity and mezzanine financing business within Nedbank Corporate and Investment Bank, will partner with Burstone on the platform, according to a statement from Burstone issued on Friday.
“This transaction transforms our balance sheet, diversifies our income and positions Burstone as a genuine funds management business with a growing and recurring fee revenue base. We remain committed to delivering on our dividend guidance and to scaling this platform into a leading South African real estate vehicle,” said CEO Andrew Wooler.
Burstone will retain a 50% equity interest in the SA Core Plus platform and will act as both fund manager and asset manager, providing the group with continued economic exposure to the underlying assets, as well as recurring management fee income.
“We are delighted to partner with Burstone on the Core Plus transaction, which we believe will become a premier South African real estate platform,” said Jean Roux, divisional executive at NPP.
The SA Core Plus platform was structured to enable the future introduction of additional private and institutional capital, aiming to create a scalable, permanent-capital vehicle through which third-party investors can participate alongside Burstone in the growth of a diversified South African real estate portfolio.
“The NPP partnership is the first close, and Burstone is currently engaged with another significant institutional investor on terms for a second close,” Wooler said.
Importantly, the transaction aims to create the firepower to support the growth of Burstone’s platform strategy by releasing R4.5bn in capital for local and international growth opportunities.
The transaction follows a strategy that Burstone has been executing across multiple geographies.
In Europe, Burstone launched its fund and asset-management model through partnerships such as Hines European Real Estate Partners III and its European light-industrial platform. In Australia, the strategy was extended through the Irongate Group.
The SA Core Plus platform completes the global framework by delivering the same model in South Africa, Burstone’s home market.
“For Burstone, the strategic and financial implications are material. The transaction is expected to be earnings-accretive and will materially increase fee revenue to 19.3% (31 March 2026: 15.5%). Third-party assets under management increased by 10.9% to R26.8bn, and equity under management increased by 4.5% to R11.5bn, enhancing the company’s diversified income model,” the statement said.
Burstone’s loan-to-value ratio is expected to reduce from 39.6% to between 17.5% and 19.5%, while its look-through loan-to-value ratio is expected to improve from 48.6% to between 40.5% and 42.5%.
Burstone’s previous dividend guidance of 4% to 6% growth in distributable income per share remains unchanged, and the transaction has been structured to preserve its REIT status.
The SA Core Plus platform’s retail portfolio will include dominant rural and peri-urban shopping centres, while the industrial portfolio consists of well-located warehousing and logistics assets supported by strong tenant covenants and long-term lease profiles.
The properties are spread across Gauteng, the Western Cape, KwaZulu-Natal, the Free State and Mpumalanga, reflecting a geographically diversified and resilient asset base.
Edward.west@nationalmg.co.za
THE NATIONAL