Nompumelelo Magwaza
A MAURITIUS property development firm, New Frontier Properties, plans to list on the JSE AltX later next week in a bid to broaden its investor base.
New Frontier believed that listing on the JSE would present an attractive opportunity to South African investors, it said in a prelisting statement yesterday.
The company is set to list on the JSE next Wednesday, continuing the trend of property listings on the bourse.
In 2014, eight property companies debuted on the JSE including Tower Property Fund, Accelerate Property Fund, Visual International Holdings, Safari Investments, Attacq Property Fund, Equities Property Fund, Freedom Property Fund and Pivotal Property Fund.
“It is the view of the board of New Frontier that South African property investors, who have enjoyed strong and stable returns from the South African real estate sector over the last few years now see comparatively attractive value in carefully selected opportunities in the real estate markets out of their country,” the group said.
New Frontier executive director Gary Fourie told Business Report that no South African investors held shares in the company yet and that the company did not have any assets in South Africa.
New Frontier already has its primary listing with the stock exchange of Mauritius and has been granted permission for a second listing by the JSE.
The group was incorporated in Mauritius in June last year and holds a category one global business licence issued by the Financial Services Commission of Mauritius.
New Frontier yesterday announced a private placement of 1 million shares to investors at $1 (R11.50) a share.
Other objectives for listing on the JSE included sourcing extra capital to fund acquisitions.
The group was established with the primary objective of acquiring and developing good quality income generating property assets primarily in frontier markets outside South Africa, but will also pursue strategic investments in developed markets.
The group believes its listing on JSE will also enhance potential investors’ awareness of the company as well as provide investors the opportunity to participate directly in the income streams and future capital growth of the company.
New Frontier has undertaken to focus on a two-fold strategy, including the income generating assets and development assets.
The income-generating assets strategy would comprise of completed buildings, held directly or indirectly.
“New Frontier will target income-generating properties with strong sustainable income from high quality tenants with strong likelihood of renewal leases on expiry,” it said.
Not only would these income-generating assets provide investors with a satisfactory yield, but they would also provide the company with a stable income and a balance sheet, it said.
Development assets will comprise greenfield developments of land or brownfield development refurbishments, upgrading or other improvement to existing office, mixed used, retail and light industrial properties.
The group had already acquired Coastal Building Holdings, a company incorporated in the British Virgin Islands which owns two-storey commercial office building in the British Virgin Islands with 462m2 of rentable area, at an annualised property yield of 8 percent.