CAPE TOWN - Texton Property Fund announced plans on Monday to sell its DHL Bawdry distribution warehouse in Doncaster, UK for £22.65 million (R450.8m), at a time when the directors are trying to buy out all the shares in the group.
Real estate investment trust Texton has a R4.5 billion portfolio of office, retail and industrial properties mainly in South Africa, and in the UK.
Texton’s share price reacted favoUrably to the proposed transaction, with the share price rising 5.56 percent to R1.52 per share Monday afternoon, while the SA Listed Property Index was down 2.4 percent at the same time. However, Texton’s share price is well down from the R6.40 that it traded at in January 3 years ago.
The price however is well above the R1.20 that the directors pitched at the end of November to buy out the shareholders. Directors Marcel Golding and Robert Franco and their associated company Oak Tech Trading, owned 42.32 percent of Texton shares on December 29, in terms of the mandatory offer.
The sale also comes as the UK braces for stiffer Covid-19 second wave related restrictions.
In November, Texton said its UK portfolio traded well in the third quarter, and was 100 percent let, with a healthy weighted average lease profile of 9.19. Uk rental collections at that stage were also at 97 percent.
Collections at Broad Street Mall were at 78 percent, significantly higher than many other malls in the UK during the quarter.
According to the directors, they had made the mandatory offer to shareholders because Texton is a small cap, illiquid stock, which had seen limited institutional support and access to equity capital, and which was operating in an extremely volatile equity and commercial environment. In the year to June 30, 2020, property income amounted to R519.2m versus R555.7m in 2019.
BUSINESS REPORT ONLINE