Pivotal looks to list on the JSE main board

Published Oct 20, 2014

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Roy Cokayne

PIVOTAL Property Fund plans to list on the main board of the JSE by December.

The company has a strategic partnership with property development and management group Abland and other developers, as well as an income producing portfolio valued at about R7.8 billion. Prior to listing, Pivotal will undertake an equity capital raising of about R1bn by way of a private placement and is expected to list with a market capitalisation of about R4.8bn.

Jackie van Niekerk, the managing director of Pivotal, said last week that the listing would provide the fund with access to equity funding to continue pursuing both development and acquisition growth opportunities while also providing investors with access to an A-grade portfolio with superior returns over the long term.

Aaron Suckerman, the financial director, said the net proceeds of the equity capital raise would be used to settle a portion of the purchase consideration of some the fund’s recently acquired properties and to settle a portion of its interest bearing debt.

“This will provide Pivotal with the flexibility to take advantage of new opportunities,” Suckerman said.

Last month, the fund announced a R1.5bn acquisition from Standard Bank. It included the remaining 70 percent majority stake in the Alice Lane premium grade office development in Sandton the fund did not already own.

Other strategic stakes in properties acquired as part of the deal include Lakeview Office Park in Roodepoort, Monte Circle Office Park development land in Fourways and the West End Office Park development in Centurion.

Pivotal achieved growth in net asset value a share of 45 percent in the year to February and has delivered a compounded annual growth rate in net asset value a share of 24 percent since 2009.

Van Niekerk said Pivotal was expected to continue to achieve strong growth going forward and to give investors the opportunity to share in sustainable capital growth from prime commercial real estate income streams and developments.

Pivotal was first incorporated by Abland in 2005 to hold its top quality completed real estate assets. In 2009, it became publicly traded in the over-the-counter market.

The fund’s strategic development portfolio is presently valued at R1.4bn but it is ultimately expected to be valued at about R6bn once it has been developed, which would boost the value of Pivotal’s portfolio to more than R14bn.

The development portfolio includes Loftus Park mixed use development in Pretoria, adjacent to the Loftus Versfeld Stadium, as well as the 56 000m2 Monte Circle Office Park and 34 000m2 mixed use offices, retail and hotel Signature Square development in a partnership in the Montecasino precinct in Fourways.

Pivotal also has an 80 percent interest in the 25 000m2 Kyalami on Main Mall, with partner Retail Africa holding the remaining 20 percent.

The company has also secured a stake in the Hazeldean regional shopping centre in Pretoria, which is part of an 800ha nodal development.

Pivotal’s diversified income producing asset base comprises 33 well established quality properties, with this portfolio 98.5 percent let and 80 percent occupied by A-grade tenants.

By area, Pivotal’s income-producing portfolio comprises 47.4 percent retail properties, 50.4 percent offices and 2.2 percent industrial property in three provinces, with 91 percent of its portfolio by area in Gauteng.

Assets in this portfolio include Centurion Lifestyle Centre, a 40 percent stake in the flagship Cradlestone Mall in western Johannesburg, the Wonderboom Junction shopping centre in Pretoria, Goldfields Mall in Welkom, the Alice Lane office development in Sandton, Ballyoaks Office Park, Stoneridge Office Park and several nearby office buildings in Modderfontein.

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