what is section 12J?

Section 12J is an investment tax incentive designed to create jobs and boost the local economy by encouraging investment into a range of private companies which meet defined criteria. The incentive gives taxpayers the ability to write off 100% of their investment against their taxable income in the year they invest.

Investors benefit from up to 45%* immediate tax relief, reducing the cost of the investment, providing downside protection and enhancing overall returns.

*at the maximum marginal South African income tax rate

Westbrooke Stac (“Student Accommodation”) Preferred is the next phase in the evolution of Westbrooke’s successful c.R900 million Westbrooke Stac investment strategy.

In the context of a challenging economic climate, Westbrooke Stac Preferred seeks to reduce risk and enhance alignment by investing in a preferred position in the student accommodation equity capital stack. This is achieved by co-investing alongside experienced, reputable student accommodation operators into a portfolio of geared, property-backed student accommodation operations. These are situated in strategically located student nodes across South Africa, in transactions whereby investor capital ranks ahead of that of our partners.

LAUNCH DATE:
FEBRUARY 2018
FUND TYPE:
SOUTH AFRICAN COMPANY
REGULATION:
FSCA AND SARS
TARGET DIVIDEND YIELD:
C.7-9% P.A.

(BASED ON NET INVESTMENT)

TARGET 5-YEAR IRR:
>15% P.A.

(AFTER FEES AND INVESTOR EXIT TAXES)

key investment highlights

100% tax-deductible

Participation in a strong capital growth underpin driven by annual rental escalations in the underlying properties

Investment into a portfolio of income-generating, geared student accommodation properties across South Africa

Exit after 5 years, through either a listing, sale to a strategic buyer / partner or an open-market disposal

Targeting a c.7% – 9% dividend yield based on net investment (gross investment less the tax deduction) which is payable semi-annually

Co-investment alongside best-of-breed student accommodation operators with track records of success

Preferred equity investment positioning reduces risk and enhances alignment with partners who stand as first-loss capital