Johannesburg - Safari Investments RSA, which strongly focuses on township retail property, was successfully listed yesterday on the retail real estate investment trust (Reit) sector of the JSE.
The fund had a market capitalisation of R1.278 billion at its listing price of R7.52, which shot up to R10 shortly after its debut.
The share price then dropped to trade consistently at R8.49 as a total of 73 775 Safari shares were traded in 15 deals by mid-afternoon. The share closed yesterday at R8.49.
Francois Marais, the chief executive, said yesterday that the fund’s listing not only unlocked value for shareholders who believed in Safari as a long-term investment, but also provided a unique retail property investment opportunity to new shareholders wanting to diversify their investment portfolios.
“The listing provides us with capital that will support our R1bn project pipeline under consideration. This includes the greenfield development in Swakopmund in Namibia.”
Marais added that the listing was the result of a number of years’ hard work and he was excited about Safari’s new chapter.
He said the management would continue to grow the fund’s asset base by developing and investing in fairly valued income-producing properties.
“Safari will focus on the management and re-development of a quality retail property portfolio that provides good growth opportunities and optimises capital growth,” he said.
Zeona Jacobs, the director issuer and investor relations at the JSE, said the exchange was always excited to welcome new companies to widen the opportunities available to investors and assist companies to reach their potential.
“Safari’s portfolio gives both South African and international investors additional exposure to listed retail property,” she said.
Safari’s listing follows the fund’s successful private placement earlier this month that raised R374.5 million from the placement of 49.17 million new Safari shares at an average subscription price of about R7.73 each.
Its 124 925m2 portfolio comprises the 42 200m2 Denlyn Centre in Mamelodi; the 41 197m2 Atlyn Centre in Atteridgeville; the 27 645m2 Thabong Shopping Centre in Sebokeng, and the 15 400m2 The Victorian community centre in Heidelberg.
Safari is in the process of developing a new regional destination centre in Swakopmund, Namibia.
The fund’s highly focused portfolio attracted a high level of pre-commitments from key institutions, including Stanlib, the Public Investment Corporation, Grindrod and WDB Investments.
The net proceeds of the private placement will be used by Safari to settle interest-bearing debt and strengthen the balance sheet for ongoing activities, with a R600m facility from Absa then used to fund its project development pipeline.
Safari was founded in 2000 by a group of private investors who created a platform for smaller investors to participate in retail property assets.
A strategic decision was taken last year by Safari’s shareholders to diversify its sources of funding and take advantage of the favourable legal and tax framework provided to qualifying property entities in terms of the real estate investment trust legislation. - Business Report