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[2016] ZACT 23
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Induplace Properties Limited v Clidet No. 947 (Pty) Ltd and Others (LM196Dec15) [2016] ZACT 23 (16 March 2016)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM196Dec15
In
the matter between:
INDLUPLACE
PROPERTIES
LIMITED
Primary Acquiring Firm
and
CLIDET
N0.947
(PTY)
LTD, SUGAR
CREEK
TRADING
289
(PTY)
LTD,
THE
TRUSTEES
FOR THE TIME BEING
OF THE
SAWHF
SA RENTAL
3 TRUST
AND
THE TRUSTEES
FOR THE TIME
BEING OF THE
SAWHF
SA
RENTAL 4 TRUST
I
N RESPECT
OF
NINE
PROPERTY
LETTING
ENTERPRISES
Primary Target Firm
Panel
: Norman Manoim (Presiding Member)
: lmraan Valodia
(Tribunal Member)
: Medi Mokuena (Tribunal
Member)
Heard
on
: 24 February 2016
Order
Issued on
: 25 February 2016
Reasons
Issued on
: 16 March
2016
Reasons
for Decision
Approval
[1]
On 24 February 2016, the Competition Tribunal ("Tribunal")
approved the proposed transaction between lndluplace Properties
Limited and Clidet No.947 (Pty) Ltd, Sugar Creek Trading 289 (Pty)
Ltd, the trustees for the time being of the SAWHF SA Rental
3 Trust
and the trustees for the time being of the SAWHF SA Rental 4 Trust in
respect of nine property letting enterprises.
[2]
The reasons for approving the proposed transaction follow.
Parties
to proposed transaction
Primary
acquiring firm
[3]
The
primary
acquiring
firm
is
lndluplace
Properties
Limited
("lndluplace")
a
private
company
incorporated
in
the
Republic
of
South
Africa.
lndluplace
is
listed
on
the
Johannesburg
Securities
Exchange
as a
Residential
Real
Estate
Investment
Trust
("REIT").
lndluplace
is
controlled
by
Arrowhead
Properties
Limited
("Arrowhead").
Arrowhead is not
controlled
by
any
firm. lndluplace and Arrowhead control other firms, collectively, the
"Acquiring
Group".
[1]
[4]
lndluplace is a property investment company that invests in
residential properties with a focus on affordable housing generally
in larger urban centers close to work opportunities and transport
infrastructure. Arrowhead holds a diverse portfolio of rentable
retail, residential, office and industrial property throughout South
Africa.
Primary
target firm
[5]
The primary target firm is Clidet No.947 (Ply) Ltd, Sugar Creek
Trading 289 (Pty) Ltd,
the
trustees for the time being of the SAWHF SA Rental 3 Trust and the
trustees for the time being
of the
SAWHF SA Rental
4
Trust ("the
Fund") in
respect of
nine property letting
enterprises
("the
Housing
Fund
Portfolio").
[2]
Proposed
transaction and rationale
[6]
The Fund is selling its asset known as the Housing Fund Portfolio in
terms of an Acquisition of Immovable Properties Agreement.
Subsequent to the transaction, lndluplace will acquire
ownership of the Housing Fund Portfolio.
[7]
lndluplace invests in residential properties with a focus on
affordable housing generally in larger urban centers close to work
opportunities and transport infrastructure.
Impact
on competition
[8]
The Competition Commission ("Commission") submits that
there is a horizontal overlap in the market for the provision
of
rentable residential property. The Commission carried out its
analysis in the relevant markets within the geographic locations
of
Jansen Park in Boksburg (Gauteng), Theresa Park in Pretoria (Gauteng)
and in Duvha Park in Witbank (Mpumalanga). The Commission
noted that
the Acquiring Group does not own any affordable housing property in
the Western Cape Province, as such no analysis was
carried out in
that location.
[9]
The Commission found that the market share accretion within the
relevant markets was negligible. The merging parties are relatively
small players in the market and would continue to be constrained by
other competitors in the relevant markets.
[10]
Competitors and third parties that were contacted by the Commission
stated that they didn't "recognise" the merging
parties in
the provision of affordable rental space in the residential property
market. Before the Tribunal, the Commission confirmed
that the term
"recognise" in such a context meant that the competitors
and third parties viewed the Acquiring Group as
a small player in the
market that was not considered as substantial competition.
[11]
The Commission therefore concluded that the proposed transaction is
unlikely to substantially prevent or lessen competition
in any
relevant market.
[12]
We concur with the Commission's conclusion that the proposed
transaction is unlikely to substantially prevent or lessen
competition
in any relevant market.
Public
interest
[13]
The merging parties confirmed that the proposed transaction will not
result in any adverse impact on employment.
[14]
The proposed transaction further raises no other public interest
concerns.
Conclusion
[15]
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 transaction. Accordingly, we approve the
proposed
transaction unconditionally.
16
March 2016
DATE
_____________________
Mr
Norman Manoim
Mr
lmraan Valodia and Ms Medi Mokuena concurring
Tribunal
Researcher:
Kameel Pancham
For
the merging parties:
Baker & McKenzie
For
the Commission:
Reabetswe Molotsi
[1]
See paragraphs 2-4, pages 5-6 of the Commission's Recommendation for
a list of companies that constitute the Acquiring Group.
[2]
See
paragraphs
7-9,
page
7 of
the
Commission's
Recommendation
for
the
breakdown
of
ownership/controllers of the
companies
constitution
the
Fund and
for
the
nine
property
letting
enterprises
within
the
Housing
Fund
Portfolio.