Old Mutual Property Group to dominate listed property sector

The Old Mutual Property Group which has been formed as a result of a merger between Old Mutual Properties and Marriott's property business, will be the biggest fund manager in the listed property sector of the JSE. Existing Marriott collective scheme investors will be unaffected by the change.

Colin Young, property executive at Old Mutual Properties and fund manager of the SA Retail Property Fund, said that Old Mutual Property Group would retain the Marriott Asset Management brand as the retail division for investors in collective property investments. Young's retail property fund, the Old Mutual SA Quoted Property Fund, will in future be managed under the retail arm of the new property group, Marriott Asset Management. 

Marc Thomas, the Marketing Director of Marriott confirmed that Marriott The Income Specialists would operate as a stand alone business unit within the Old Mutual Property Group, and that existing Marriott collective investment scheme investors would be unaffected by the proposed changes in the group.

The Old Mutual Property Group will also house an institutional property division, and international property division, a listed property division and a 'third party' division. 'It is possible that the Old Mutual Property Group will not own 100% of the companies in the Third Party division,' he said. 'Old Mutual plc is comfortable with the principle of sub brands which have their own intellectual capital, expertise and market niche.'

With respect to the listed property division Young said that said Old Mutual had never been involved in managing a listed property company and that the merger provided access to South African-listed property funds Martprop, SA Retail, Ambit and Namibian-listed Oryx. All these property funds fall under the Marriott stable.

'The Old Mutual and Marriott businesses will complement each other very well,' he said. 'Our focus to date has been on growth within the property sector, while Marriott, as their strap line 'The Income Specialists' explains, has expertise in the generation of property income. We envisage that existing Marriott management will play a leading role in the management of retail property funds,' he said.

The new group will have a 19% share of the listed property sector under its management. The market capitalisation of the JSE's real estate index is more than R50bn, and the Old Mutual Group will manage about R10bn worth of listed property.