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[2015] ZACT 69
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Investec PropertyFund Limited v Friedshelf 113 Proprietary Limited and Others (LM134Sep15) [2015] ZACT 69 (2 December 2015)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM134Sep15
In
the matter between:
INVESTEC
PROPERTY
FUND
LIMITED
Primary Acquiring Firm
and
FRIEDSHELF
113 PROPRIETARY LIMITED;
DOUBLE
FLASH INVESTMENTS 51
PROPRIETARY
LIMITED; AND
CERTAIN
PROPERTY LETTING ENTERPRISES
HELD
BY ASSOCIATED TRUSTS AND
MANAGED
BY ZENPROP PROPERTY
HOLDINGS
PROPRIETARY
LIMITED
Primary Target Firms
Panel
: Andreas Wessels (Presiding Member)
: lmraan Valodia
(Tribunal Member)
: Medi Mokuena (Tribunal
Member)
Heard
on :
25 November 2015
Order
Issued on :
25 November 2015
Reasons
Issued on :
02 December 2015
Reasons
for Decision
Approval
[1]
On 25 November 2015, the Competition Tribunal ("Tribunal")
approved the proposed transaction involving Investec Property
Fund
Limited, Friedshelf 113 Proprietary Limited, Double Flash Investments
51 Proprietary Limited and certain property letting
enterprises held
by associated trusts and managed by Zenprop Property Holdings
Proprietary Limited.
[2]
The reasons for approving the proposed transaction follow.
Parties
to proposed transaction
Primary
acquiring firm
[3]
The primary acquiring firm is Investec Property Fund Limited
("Investec Property Fund"). Investec Property Fund is
a
property investment company which has Real Estate Investment Trust
status and is listed on the Johannesburg Stock Exchange Limited
(JSE).
[4]
Investec Property Fund's property portfolio is managed by Investec
Property Proprietary Limited ("Investec Property").
Investec Property is wholly-owned by Investec Property Group Holdings
Proprietary Limited ("Investec Property Group"),
which is
in turn wholly-owned by Investec Limited. For the purposes of
assessing this transaction, these firms and their subsidiaries
are
collectively referred to as the "Investec Group".
[5]
The Investec Group is an international specialist banking group that
provides a diverse range of financial products and services.
In
addition, it owns office, retail/dealerships, industrial and hotel
properties located throughout South Africa. Relevant to the
assessment of this transaction are its industrial, retail and office
properties located in Gauteng, KwaZulu-Natal and the Western
Cape.
Primary
target firms
[6]
The primary
target firms
are
Friedshelf
113
Proprietary Limited;
Double
Flash
Investments
51 Proprietary Limited; and certain property
letting
enterprises
held by
associated
trusts
and
managed
by Zenprop
Property
Holdings
Proprietary
Limited
(collectively referred to hereinafter as
the
Zenprop-managed Portfolio
[1]
.
[7]
The Zenprop-managed Portfolio comprises of industrial, retail and
office properties located in Gauteng, KwaZulu-Natal and the
Western
Cape.
Proposed
transaction and rationale
[8]
Investec Property Fund intends to acquire sole control of the
Zenprop-managed Portfolio.
[9]
Investec Property Fund submitted that the proposed transaction is
consistent with its overall growth and investment strategy.
Impact
on competition
[10]
The Competition Commission ("Commission") identified
several horizontal overlaps between the activities of the merging
parties.
[11]
In terms of industrial properties, the identified overlaps were:
•
the
provision Elandsfontein, of light
industrial
property
in a node
encompassing Spartan/Kempton
Park, Jet
Park,Meadowdale, Sebenza/Germiston and Pomona;
•
the provision of
light industrial property in a node
encompassing the
lsipingo/Prospecton/Mobeni and Wentworth
nodes; and
•
the
provision of heavy
industrial Elandsfontein, Spartan/Kempton
Sebenza/Germiston and
Pomona. property in a node
encompassing Park, Jet Park,
Meadowdale,
[12]
In terms of retail properties, the identified overlap was:
•
the provision of
rentable retail space in lifestyle
centres within a
node encompassing Fourways,
Bryanston, Rivonia, Sandlan and Woodmead.
[13]
In terms of office property, the identified overlaps were:
•
the provision of rentable
Grade A office property within the Umhlanga Rocks node;
•
the provision of rentable
Grade B office property within the Sandlan node;
•
the provision of rentable
Grade B office property within the Fourways node;
•
the provision of rentable
Grade P office property in the Sandlan node; and
•
the provision of rentable
Grade A and Grade P office property within the Bryanston node.
[14]
The Commission found that within each of the markets identified
above, the post merger market shares of the merged entity
remain
below 25%. In addition, the Commission noted the presence of a number
of alternative players which would constrain the behaviour
of the
merged entity. The Commission therefore concluded that the proposed
transaction is unlikely to substantially prevent or
lessen
competition in any relevant market.
[15]
We concur with the Commission's conclusion that that the proposed
transaction is unlikely to substantially prevent or lessen
competition in any (potential) relevant market.
Public
interest
[16]
The
merging
parties
confirmed
that
the
proposed
transaction
will
not
result
in any
adverse impact on employment.
[2]
[17]
The proposed transaction further raises no other public interest
concerns.
Conclusion
[18]
In light of the above, we conclude that the proposed transaction is
unlikely to substantially prevent or lessen competition
in any
relevant market. In addition, no public interest issues arise from
the proposed transactions. Accordingly, we approve the
proposed
transaction unconditionally.
_________________________
Mr
Andreas Wessels
Ms
Medi Mokuena and Mr lmraan Valodia concurring
02
December 2015
DATE
Tribunal
Researcher:
Karissa Moothoo Padayachie
For
the merging parties: Vani
Chetty from Baker & McKenzie
For
the Commission:
Reabetswe Molotsi
[1]
For further
details
of these
properties,
see Table
4 of the
Report
on
Assessment
of
Competitive Conditions in
the
Relevant
Market
filed
by the
merging
parties,
record
pages 92 to
94.
[2]
Inter
alia
merger
record
page 9.