CAPE TOWN – The Investec Australia Property Fund (IAPF) is planning a primary listing on the Australian Securities Exchange (ASX) and hopes to raise A$100 million (R1 billion) in the process.
The IAPF is managed by Investec Property and listed on the JSE. Its portfolio of more than A$1bn is invested in properties in Australia and New Zealand and managed by a team in Australia.
IAPF plans to raise the funds mainly from the Australian capital markets through the issue of 76.9million new units. The new units were expected to start trading on the ASX at the end of this month, while the IAPF’s secondary listing in Bermuda would be terminated, leaving it “dual primary listed” on the JSE and ASX, a statement said on Friday.
The final subscription price, expected to be between A$1.30 and A$1.35, will be determined from an institutional book build.
The proceeds will mainly go towards repaying debt. The IAPF’s results for the year to end March 2019, also released on Friday, showed revenue increased to A$89.5m, operating profit rose to $64.3m from A$57.5m last year, while attributable income to unit holders fell sharply to $53.1m from A$108.2m.
The Investec Property Fund (IPF) said it intended to make available 45 million IAPF shares held by the fund for institutional shareholders, if the IAPF offer was oversubscribed.
The aim is to get broader investor engagement in Australia and to improve the after-market liquidity in IAPF units. The IPF intends to retain a 10percent shareholding in the IAPF.
“IAPF has delivered a compelling total rand return since listing on the JSE in October 2013, underpinned by a high-quality asset base and solid Australian real estate fundamentals, managed by an experienced on the ground team that has a proven track record of delivery,” the IPF’s management said in a statement.
The listing in Australia comes at a time when the IPF is shifting its investment towards a pan-European focus.
“Although the sale (of IAPF shares) will reduce the fund’s offshore exposure in the short term, given the remaining Pan-European Strategy capital commitments of 40m (R641.5m) into the logistics platform and 64.5m into the light industrial platform, it is likely that offshore exposure will increase towards the end of the financial year.” IPF’s management said.
The IPF said it intended to invest in a Pan-European light industrial platform strategy and the funds raised through the IAPF sale would be used to delever the balance sheet or would be deployed into this strategy.
Separately, IPF said it had committed 64.5m for a 42.9 percent stake in Luxco, an unlisted portfolio of 21 properties in France, Germany and the Netherlands.
Last year, the IPF concluded an investment in its Pan-European Logistics Platform, which was aimed at benefiting from the growth of e-commerce across Europe.
The IAPF’s units fell 0.37 percent to R13.30 on the JSE on Friday. The IPF’s unit price increased 0.63 percent to R16.10.