Financial services and investment firm YW Capital and corporate and investment bank RMB have completed a R2.25-billion transaction that will see YW Capital's industrial and logistics real estate investment platform IronOak acquire 65% of three distribution centres supporting retailers PEP's and Ackermans' operations across Southern Africa.

IronOak acquired a 65% shareholding in Badger Properties, which owns the portfolio of distribution centres.

JSE-listed retail investment company Pepkor retains the remaining 35% shareholding of Badger Properties, while the transaction releases about R2-billion in capital to it.

The portfolio comprises about 280 000 m² of gross lettable area, and includes the Ackermans and PEP distribution centres in Hammarsdale, in KwaZulu-Natal, and the PEP distribution centre in Kuilsriver, in the Western Cape.

The properties form part of the logistics infrastructure that supports the retailers' operations across Southern Africa.

“The capital tied up in these three distribution centres does more for Pepkor in our core retail business than it does sitting in property,” says Pepkor asset management head Shaun Barnard.

“Partnering with IronOak releases the bulk of this capital while we retain a shareholding in the portfolio and secure long-term occupation of the facilities our stores depend on. IronOak brought long-term capital and a willingness to structure around our operational requirements,” he says.

IronOak has been developed through a long-term partnership between YW Capital and RMB.

RMB committed seed equity alongside YW Capital and provided financing to the fund, giving the partners funding certainty through the transaction and a foundation from which to grow the platform beyond the Pepkor portfolio.

“These properties help keep Pepkor's retail operations moving. Through IronOak, we are bringing long-term capital to assets that businesses depend on, while giving property owners greater flexibility in how they fund their operations. This investment provides a substantial foundation from which to build further industrial and logistics property partnerships,” says YW Capital CEO Mesh Pillay.

“RMB supported IronOak with investment capital, financing and structuring capability, and created a platform that can grow over time while giving Pepkor greater flexibility to unlock capital from operationally important assets,” says RMB senior transactor Keenan Jacobs.