Newpark to pursue future growth

Newpark is the owner of the JSE building in Sandton, as well as the adjacent 24 Central. The company seeks to raise equity through the listing so that it can pursue future growth opportunities. File picture: Siphiwe Sibeko, Reuters

Newpark is the owner of the JSE building in Sandton, as well as the adjacent 24 Central. The company seeks to raise equity through the listing so that it can pursue future growth opportunities. File picture: Siphiwe Sibeko, Reuters

Published Jan 27, 2016

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Johannesburg - Newpark Real Estate Investment Trust, which owns two A-grade commercial properties in Sandton, including the JSE building, is set to list on the JSE’s AltX next week.

The company said yesterday that the JSE had granted Newpark a listing in the diversified Reits sector of AltX, with effect from the commencement of trade on February 3, subject to the company satisfying the listing requirements in regard to the spread of shareholders.

Prior to listing, Newpark embarked on a private placement to raise up to R62.5 million from invited investors for up to 10 million ordinary shares in Newpark at an issue price of R6.25 a private placement share.

It said the main purposes of the private placement and the listing were to establish a new holding company to provide both institutional and private investors with an opportunity to participate over the long term in the income streams and future capital growth of the group; enhance the liquidity and tradability of the shares; provide the group with a platform to raise equity funding to pursue growth and investment opportunities in the future; and enhance the public profile and general public awareness of Newpark.

The private placement opened at 9am yesterday and closed at 5pm.

Newpark said the listing was not conditional on raising a minimum amount in terms of the private placement.

Long-term capital

The proceeds of the private placement will be used by Newpark to partly settle the subscription price and purchase price for all the shares and claims in Newpark Towers.

Newpark was registered and incorporated as a public company on December 7 for the purposes of listing its assets, the 18 163m2 JSE building and adjoining 15 084m2 24 Central building, which are owned by Newpark Towers, which on listing will be a wholly owned subsidiary of Newpark.

In an abridged prelisting statement published yesterday, Newpark said Newpark Towers had for several years owned and operated the properties, which were long-term capital assets that it believed had significant value and upside.

Newpark said its investment strategy was to seek similar well-positioned prime commercial properties that provided good yielding income flows with a potential of upward rating on lease renewals or redevelopment opportunities in medium term of five to 10 years to long term of 10 to 20 years.

In regard to the company’s prospects, Newpark said the group’s intention was to focus on acquiring high quality properties in nodes that offered superior capital growth and annuity rental income.

Newpark is projecting distributable income of R49.5m in the year to February 28 next year, which it said would equate to a distribution of 49.47c a share for the 100 million shares in issue.

All of the directors of Newpark are South African nationals.

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