SME Property Funds Started by Business Partners Ltd to Impel Entrepreneurial Investment in SA
Category News
Business Partners Limited launched two specialist SME funds for the property sector. The company’s aim? Drive property ownership and enable entrepreneurs to grow their equity base.
At the launch of the funds in Johannesburg, MD of Business Partners Ltd, Nazeem Martin, had this to say, “Despite South Africa’s economic challenges, the local commercial property market continues to offer value for potential investors, and, in particular, entrepreneurs.
“It is anticipated that quality commercial and industrial properties in the country will continue to boast risk-adjusted yields above most other investment classes in the near future. We therefore believe that commercial and industrial property remains an attractive investment for entrepreneurs, either as a sound long-term investment or to secure tenure for their own business operations.”
One of the two funds, the Business Partners Property Fund, will make available R200 million to provide affordable finance for SMEs (across many industries) which will allow business owners to refinance and/or purchase their own commercial premises and/or office space and industrial property. The financing is available to these entrepreneurs with no requirement for a deposit and, upon qualifying, businesses could hope to expect 100% financing.
Martin commented further, “Generally, conventional financiers require a cash deposit before financing a property deal. The Property Fund will cater to entrepreneurs with viable operating businesses, in existence for over three years, that wish to purchase their own premises but that have limited capital or security to contribute, or that do not want to compromise their business’s cash resources for the deposit.”
He went on to explain that a saving of up to 50% on the costs of premises could be made over the period of a decade if businesses were able to purchase their business premises, and this without the risk of compromising the business’s liquid resources.
The second of the two funds, the Business Partners Joint Venture Property Fund (with a R250 million capital base) will be providing term finance or equity (or a hybrid of the two) to business owners to buy multi-tenanted industrial property, commercial property (including office space), or retail property, with a value of between R2 million and R120 million.
Martin spoke about BPL, “Business Partners Limited has extensive experience in dealing with joint venture partners’ specific needs and has a proven track record in maintaining successful and well-managed partnerships. With the launch of these new funds, we seek to achieve a greater developmental impact in the local SME sector. This is to ensure that local entrepreneurs are able to play their rightful role of generating wealth, growing the economy and creating jobs.”
Author: Ashbrook
