Johannesburg - Absa Commercial Property Finance (CPF), which opens an office in London next month, aims to mirror the Absa group objective of switching 30 percent of its assets and income offshore.
This was confirmed early this week by Rob Jeffery, CPF's general manager.
Jeffery said CPF would be establishing a fully operational business within its London office to assist its South African clients with the financing of various property acquisitions and joint venture opportunities in the UK and Europe.
Andrew Glencross, the general manager-designate of the CPF office in London, said the office would start operating from September 2 this year, but would take a few months before it was fully operational.
Glencross said they anticipated growing the loan book to about R500 million in the next two years.
"That's small in terms of pound sterling and dollars, but big for Absa.
"Within three to four years we anticipate that a substantial portion of our business will be within Europe to complement our South African business," Glencross said.
He also added that the local listed property sector had performed well over the past two years, but was now going through a dip. The development of office space was almost at a standstill because of, among other things, an oversupply in the market.
Glencross said this trend would take at least two years to work its way out. He believed CPF's entry into the overseas markets would enable it to have another source of income growth to complement its South African operations.
He said the maximum individual loan it anticipated doing through its London office was about P10 million, but stressed CPF would not be competing with the high street banks for senior debt funding.
He said the CPF London office initiative had been pushed by its South African client base, some of whom were expanding their operations offshore.
Glencross said CPF had already funded close to P8 million in deals in the UK for two established South African property companies.
"Although our initial focus is to assist existing and new South African clients to diversify their risk and income base into overseas markets, over time we hope to establish a track record that will attract UK and European clients as well."
Jeffery said that foreign investors were also keen to get into South Africa.
"It's high risk but also offers a higher return."
Jeffery said CPF had a significant stake in Bankhaus Wolbern in Hamburg, which had an excellent track record in funding, arranging funding and assembling commercial property investments for clients in Europe.
He said one of CPF's goals was to integrate the service Bankhaus Wolbern provided with CPF's property client base in South Africa.