The shake-up in the listed property sector through consolidation and new listings is continuing, with township retail property fund Safari Investments RSA reporting it would be listing in the retail real estate investment trust (Reit) sector of the JSE next week.
The announcement follows Atlantic Leaf, a property firm listed on the Stock Exchange of Mauritius, reporting last week it had been granted approval by the JSE for a secondary listing on junior exchange AltX. It is due to list tomorrow.
There has also been increased corporate activity in the listed property sector this year. Negotiations took place about the potential of a three-way merger between Rebosis, Ascension and Delta, and last month Redefine reported its firm intention to make an offer to acquire the entire issued capital of Annuity Properties.
Safari, which has a R1.276 billion portfolio comprising four retail centres in the former townships, plans to list in the Reit sector on Monday.
Prior to listing, it aims to raise between R315 million and R400m through a private placement of between 42 million and 52.2 million new ordinary shares with selected eligible investors at a price to be determined by demand but at an indicative price of R7.52 each.
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, while a R600m facility from Absa will be used to fund its project development pipeline.
Safari was founded by its chief executive, Francois Marais, about 14 years ago and intends to remain a 100 percent retail property fund. Its portfolio comprises Denlyn Centre in Mamelodi at 42 200m2, the 41 197m2 Atlyn Centre in Atteridgeville, the Thabong Centre in Sebokeng at 27 645m2, and the 15 400m2 The Victorian community centre in Heidelberg. It is also developing a new regional destination centre in Swakopmund, Namibia.
Marais said the listing would give potential backers a unique opportunity to invest in a retail portfolio consisting of high-quality, high-growth assets based in high-growth areas that offered a community retail focus with a strong financial position and an attractive pipeline of projects. “Our centres’ superior performances are evidenced by the 0 percent vacancy rates and strong rental escalations achieved for the preceding three years.
“Our entrepreneurial foundation, extensive experience and low-risk approach allows us to deliver stable, resilient cash flows supported by significant long-term income generation over time.”
The rationale for its listing is, among other things, to provide qualifying investors with an opportunity to participate over the long-term in its income streams and future capital growth; obtain an increased spread of shareholders to enhance the liquidity and tradeability of the shares; give Safari access to a central trading facility, providing liquidity to shareholders; and provide Safari with access to capital markets and platform to raise funding to pursue growth and investment chances.
Marais said Safari was well positioned for organic growth and greenfield development.
“Based on demand and commitments from national tenants, we have more than R1bn of projects under consideration. This includes 45 000m2 of retail space in further developments in Atteridgeville and Sebokeng and the greenfield development in Namibia.”