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Subscription for shares in Starwood Real Estate Income Trust offshore fund, SPC
TEXTON PROPERTY FUND LIMITED
Granted REIT status by the JSE
(Incorporated in the Republic of South Africa)
(Registration number 2005/019302/06)
JSE share code: TEX ISIN: ZAE000190542
(“Texton” or the “Company”)
SUBSCRIPTION FOR SHARES IN STARWOOD REAL ESTATE INCOME TRUST OFFSHORE FUND, SPC
1. INTRODUCTION
The board of directors of Texton (the “Board”) is pleased to advise shareholders that the
Company’s wholly owned United Kingdom subsidiary, Texton Property Investments UK Limited
(“TPI”), has increased its shareholding in Starwood Real Estate Income Trust Offshore Fund, SPC
(“SREIT Offshore”) SP Class I shares from $3.5 million (ZAR 55.6 million) to $7.0 million (ZAR
111.2 million) (“the Transaction”).
The total number of SP Class I in issue as at 30 September 2021 amounts to 142,390,000 shares.
The SP Class I shares had attributable Net Asset Value (“NAV”) of $3.5 billion and a Net Asset
Value per share (“NAVPS”) of $24.40 at 30 September 2021. Texton will be subscribing for the
additional shares at NAVPS of $25.65 (NAV as of 30 November 2021) and Texton total
shareholding in the SP Class I shares will amount to 0.21% of the SP Class I shares in issue.
2. RATIONALE
Texton will gain exposure to an institutional grade, non-traded REIT focused primarily on United
States of America (“USA”) real estate. The primary objective of SREIT Offshore is to seek returns
by investing substantially all of its assets in Starwood Real Estate Income Trust, Inc., a Maryland
corporation (“Starwood REIT”). Starwood REIT is a non-listed, perpetual-life real estate investment
trust with an investment strategy to primarily acquire stabilized, income-oriented commercial real
estate and debt secured by commercial real estate to create a portfolio principally comprised of
properties, and debt secured by properties, located in the USA, but also of investments in properties
and debt secured by properties, outside of the USA, with a focus on Europe. Starwood REIT also
invests in real estate-related securities to provide a source of liquidity for its share repurchase plan,
cash management and other purposes. Starwood REIT has a total asset under management of
$18.2 bn which consists of 334 properties that is currently 96% occupied.
As at 30 November 2021 the fund is comprised of 70% multifamily, 15% industrial, 8% office, 3%
loans, less than 1% single-family rental, less than 1% hotel, less than 1% medical office and less
than 1% net leases. The investment targets monthly distributions and Texton has optionality to exit
the fund through a share repurchase plan. The liquidity option is subject to the terms and conditions
of SREIT Offshore’s share repurchase plan(1).
Investing in SREIT Offshore meets several strategic and investment goals for Texton and increases
the indirect offshore property exposure as Texton continues to deploy capital into developed
markets. Texton has strong conviction in the investment themes and sector tailwinds that are
supported by a growing US economy.
The investment in SREIT Offshore will provide Texton with current income in the form of regular,
stable cash distribution to achieve an attractive yield on the investment, whilst preserving and
protecting invested capital. Furthermore, we expect to realise capital appreciation in the underlying
asset as our investment benefits from proactive investment and asset management from the
sponsor team, Starwood Capital Group Holdings, L.P. (the “Sponsor” or “Starwood Capital”).
Central to Texton’s deployment strategy is a strong bias towards partnering with best-in-class asset
managers. The Sponsor has managed real estate on behalf of some of the world’s largest
institutions, with over $100bn in assets under management.
The USA macros combined with investing alongside the one of the world's largest real estate asset
managers provides an appealing capital allocation opportunity for Texton. Further information on
Starwood REIT and its activities are available at https://www.starwoodnav.reit/.
3. TERMS OF THE TRANSACTION
The subscription of shares in SREIT Offshore and payment for the shares does not have any
conditions. Texton originally made an investment of $3.5 million (ZAR55.6 million) on 1 December
2021 and has increased in position in fund to $7.0 million (R111.2 million) effective 3 January 2022.
Texton invests at Net Asset Value (NAV).
4. FINANCIAL INFORMATION
The details of Starwood REIT as reported in the Form 10-Q report to the United States Securities
and Exchange Commission for the nine months ended 30 September 20212 are as follows:
1. Total asset value: $11.8 billion;
2. Total equity: $4.9 billion;
3. Net loss: $174.7 million;
4. Distribution for the nine months ended 30 September 2021: $0.1035 per share or 5.23%
annualized distribution rate;
5. Reported NAVPS: $24.40.
5. CATEGORISATION OF THE TRANSACTION
The purchase of shares in SREIT Offshore is a category 2 transaction in terms of the JSE Listings
Requirements and accordingly does not require approval by shareholders
Footnotes:
(1) The repurchase request and required documentation must be received in good order by 4:00 p.m. (Eastern time)
on the second to last business day of the applicable month. Settlements of share repurchases will be made within
three business days of the repurchase date. SREIT Offshore is not obligated to repurchase any shares and may
choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any
particular month. The discretion to repurchase shares is at the directive of the board of directors of SREIT and
subject to the JSE Listings Requirements in respect of Texton, if applicable.
SANDTON
10 January 2022
Corporate adviser and sponsor
Investec Bank Limited
2 Please refer to https://www.starwoodnav.reit/investor-relations/ for more detailed disclosures
Date: 10-01-2022 11:00:00
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