Liberty’s new property portfolio offers customers the unique opportunity to invest at a discount. We delve into the details of the portfolio and answer some of your most frequently asked questions.

All Liberty customers qualify for an opportunity to invest in the listing of Liberty’s prestigious property portfolio at a discount. Here are some of the details you need to know:

Liberty recently announced the listing of a portion of its highly sought-after premium property portfolio. By now you should’ve received information on the Liberty Real Estate Portfolio (LREP) and the offer of discounted shares to existing Liberty customers.

Liberty Two Degrees will be listed as a Real Estate Investment Trust (REIT), which will include a portion of Liberty’s premium property portfolio. Liberty will be forming the LREP for its retail customers, which will invest exclusively in the shares of Liberty Two Degrees. The LREP will receive a full allocation of Liberty Two Degrees shares up to a value of R4 billion at a 5% discount to the listing price. The R4 billion worth of shares will be offered as follows:

• Existing investors in the Liberty Property Portfolio have the option to switch all or part of their portfolio into the new LREP, subject to a maximum subscription value of R3 billion.
• All existing Liberty customers, including those invested in the Liberty Property Portfolio, have the option to invest new funds in the LREP, subject to a further limit of R1 billion.

While we’re very excited about being able to provide our customers with this discounted offering, it’s important that you speak to your financial adviser to ensure that the investment meets your current financial needs and risk profile, especially for those customers invested in retirement annuities.

What you need to know

Can I switch my retirement annuity from the Liberty Property Portfolio to the LREP? Retirement annuities fall under Regulation 28 of the Pensions Fund Act, which limits the amount you can invest in listed assets, such as equities and listed property. The LREP is made up exclusively of shares in Liberty Two Degrees, which is a REIT, otherwise known as “listed property”. Although the property portfolio of Liberty Two Degrees is made up of the same properties as your existing investment in the Liberty Property Portfolio, Regulation 28 stipulates that a fund cannot invest more than 15% in a single listed property company. Therefore, you can only switch 15% of your retirement annuity funds from the Liberty Property Portfolio to the LREP. It’s worth noting that the listing of the property portfolio will still benefit investors who remain in the Liberty Property Portfolio, as the value of the entire property portfolio should increase by between 3% and 5% with the listing of Liberty Two Degrees.

Does the LREP have the same risk profile as my Liberty Property Portfolio? The LREP carries a higher risk profile as the value is determined by the share market. Currently, the Liberty Property Portfolio is valued once a year, based on property valuations and investment bonuses. The value of LREP, on the other hand, will be determined by the share price of Liberty Two Degrees, which will trade on the open market. Factors such as interest rates, economic outlook and investor sentiment, affect share prices on a daily basis influencing the relative valuation of your investment in LREP.

As Liberty Two Degrees is a REIT, it’ll be allowed to borrow money to invest in new properties. This gearing allows the fund to grow, but also increases the risk of the fund. Over time, the gearing should allow the LREP to increase in value ahead of the Liberty Property Portfolio, but at a higher risk. For investors who prefer less risk and a more predictable growth rate, the Liberty Property Portfolio would be more appropriate.

What happens to my bonus if I switch from Liberty Property Portfolio to the LREP? The Liberty Property Portfolio pays out a bonus twice a year with the next bonus due in December. Investors who choose to switch to the LREP will still receive a pro-rata bonus.

When do I have to make my decision? The offer to existing Liberty customers closes on 31 October 2016 and is dependent upon Liberty Two Degrees being listed. It’s important to note, however, that switches and new investments will be done on a first-come-first-served basis. Switches from the Liberty Property Portfolio will be limited to R3 billion and new investments are limited to R1 billion.

Time for something fresh!

Read more about our new offering that provides a wider range of investors access to Liberty's iconic properties.

Click here for more information.

Although you may have taken out a policy or investment plan in your 20s, your 30s are really when you start to focus on a holistic financial strategy. Palesa Tlholoe shares the questions you need to be asking.

Should you become critically ill, it could affect your future cover, but all existing cover remains in place and at the same premium. Here’s what you need to know about cover after an illness.

As the industry adjusts to the changes brought by the Retail Distribution Review, it’s important for financial services consumers to understand their rights and the implications of paying for advice.

The ability to tell the facts from the fiction when it comes to health myths can make all the difference when it comes to treatment. We look at three common cancer myths and give you the facts.

Got a question? We're here for you!

Thank you for the feedback we have received on these newsletters so far. Your comments and suggestions will help us to give you relevant information for planning and managing your finances. Please keep talking to us and telling us what you think by contacting us via the channels below.