IT’S only March and already the consolidation of South Africa’s listed property sector is not letting up. Investors are so hungry for liquidity that the larger property funds are in the pound seats since they are able to buy out the smaller ones to take advantage of this.

There have been numerous deals since late last year, the latest clinched last week when Redefine Properties, the second-biggest local listed property company in South Africa with a market cape of about R27bn, announced it would buy Annuity Properties (R1.2bn). Annuity’s portfolio includes offices and suboffices of some of South Africa’s better-known companies. It owns Sasfin’s head office in Waverley, Johannesburg, for instance, and the Woolworths call centre in Cape Town.

Analysts differ as to whether the transaction will add much long-term value to Redefine, but most agree Annuity unitholders will gain, as the group avoids some of the refinance risk that was steadily building up.

Another deal in the offing is a triple merger between black economic empowerment funds Delta, Rebosis and Ascension. Talk is that two of the medium-to-large funds are also on the verge of announcing a merger as listed property shifts from a few relatively large companies and many much smaller ones, to a more balanced spread.

According to industry stalwart and Arrowhead Properties CEO Gerald Leissner, South Africa’s competition authorities have not turned down a property deal for a long time.

MIRRORING other established beer markets, the microbrewery industry in South Africa is exploding. Fuelled by craft beer festivals and an increasing number of bars and restaurants offering unique beers to their patrons, the number of mircobreweries has grown exponentially. The hops farming division of South African Breweries (SAB) now supplies hops to about 140 microbreweries, from as few as 10 just five years ago.

SAB seems to have recognised that it is in its interest to support the craft sector, as such efforts promote beer in general. Though its hops and barley subsidiaries cannot supply all SAB’s needs, they allocate a small portion of their product to microbreweries. SAB also sponsors beer festivals and provides expertise to microbrewers.

The growth of the craft market off a very small base is not a concern for SAB, whose local market share is more than 90%. SAB itself recently invested in reviving a microbrewery alongside its Chamdor Brewery, allowing it to experiment and develop seasonal beers for events such as festivals. But the craft beer market’s rapid growth is unlikely to continue at such a frenzied pace, and time will strip out the inconsistent and poorer quality brewers from the rest.

Nonetheless, some brands are firmly establishing themselves in the market and could at some point nibble away at SAB’s overwhelming market dominance.

• Dave Marrs edits Company Comment (marrsd@bdfm.co.za)