OrbVest has grown from the personal property investment portfolio of three successful SA entrepreneurs into a $300m business owning 30 medical blocks in the US. In this podcast, CEO Martin Freeman explains why the company has been one of the few winners from Covid-19, tells us there’s only one project still available for investing into, and looks ahead to a Nasdaq listing. – Alec Hogg
Martin Freeman on 2020:
We really are very privileged. It was a watershed year for us. We really showed strong growth in 2020. We launched seven projects. A real highlight was that we also launched our own product to diversify our holdings product, which was consistently sold out. Then to cap everything in quarter four, we actually became a fully fledged general partner in the United States. What does this mean? It means that the last two deals we acquired, we did it 100% on our own, leveraging our own balance sheet and our reputation.
This is really a huge step forward for us because this opens the door for large institutions to now partner us anywhere in the world. Given the fact that the structures are much simpler and it’s easier for them to invest with their mandates and earn, as you know, the consistent dividends that we produce.
On the impact of Covid-19 on the business:
We always like to say one of the fortunate recipients of the Covid pandemic. It’s not a nice thing to say, but there’s always winners and losers in every scenario. As we know, people around logistics – online etc – did very well last year. Their businesses flourished. The one thing that everybody saw was that the medical niche and the medical sector did unbelievably well for us. We were able to consistently maintain our dividends on all our tenants that were in our buildings.
It really attracted a large amount of capital and interest. I think we saw a lot of the smart money – not only in the United States but around the world – shift from other sectors of real estate, investing in equities, into this particular niche. Just because of one thing – it really just gives somebody that peace of mind to be able to invest, as opposed to as we know at the moment. The equities market is up and down, the lofty valuations. Can it continue forever? Our dividend’s certainly do.
On looking forward to becoming a Nasdaq-listed company:
So in 2020 we broke all our records in terms of our metrics and we are thrilled with the performance. In terms of going forward, we anticipate to still be acquiring between $150m and $200m of real estate per annum. What that means is that the portfolio will consistently grow from – it’s almost $400m up towards the billion. As we said, when we get to $1bn, we would like to consider a move of our listing to the Nasdaq. We’re on track.
On the reaction to the medical 30 project:
We’ve been wanting to go into Arizona for a long time and we managed to acquire medical 29 in the same area of Phoenix. That was obviously sold out, acquired and closed out in December. Medical 30, the response so far has been great. What there is, is the usual January lag. It’s the lull where people have committed to the funds and they are investing. They’re good clients of ours.
But getting back into the rhythm and moving the money overseas takes a little bit of time. I’ve certainly seen that for the last couple of years – we have the January lag from the December holiday. But the response has been unbelievable. We will target more buildings in Arizona. Just to give you a sense of where we are going, we expect to close out a minimum of ten deals this year, which means we will be bringing a deal to the platform almost every month. That will be spread across our partners and different states in the US.
On OrbVest:
My partners have been acquiring buildings for seven years now. This will be the seventh year. So it really has been very slow, measured growth –Â Â just moving slowly, every year and just growing from the year before. What I would say right now is that we are well poised to accelerate the growth, given the fact that we’ve got all the systems [and] the track record. We’ve got the network in America and we’ve become a general partner. Everything is well set for strong growth.
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