Black-owned property loan stock company Ascension Properties made its debut on the JSE on Monday.
The company listed its A-linked and B-linked units at R3.80 and R1.90 for each linked unit.
It raised R374-million during a private placement to selected investors prior to the listing.
The company currently owns a portfolio of nine properties located in Gauteng and the Western Cape valued at about R524.1-million and has entered into agreements to acquire a further eight properties, valued at R457.2-million.
CEO Ashraf Mohamed said the company planned both organic and acquisitive growth. “We intend to achieve organic growth through the renovation of vacant portions of some of our existing properties with the intention to secure further anchor tenants and increase earnings.”
Speaking to Engineering News Online, Mohamed said the company's biggest growth potential was in the central business districts of cities such as Pretoria, Johannesburg, Cape Town and Nelspruit. “By upgrading our buildings, we also increase our rental pool,” he said.
The company aims to develop into a multibillion-rand fund over the next few years. “Our strategy is to grow the portfolio by at least R1-billion a year. We have a current pipeline of R2.3-billion, so I believe that Ascension will comfortably meet that target in the foreseeable future,” Mohamed noted.
Assuming that the planned acquisitions are concluded in July, Ascension is expecting to report revenue of R182-million and operating profit of R125.5-million for the year ending June 30.
The proceeds of the private placement would be used primarily to fund the acquisition of the new properties and to reduce debt.
“As one of only three black-managed listed property funds in South Africa, the directors anticipate that the company will continue to be in a position to take advantage of opportunities to secure long-term leases with government and other empowerment sensitive tenants.”
He added that smaller black economic-empowerment players in the property sector looking to exit their government portfolios might opt to dispose of their properties to Ascension in exchange for linked units in the listed company.
JSE CEO Nicky Newton-King said with the listing of Ascension on the JSE, investors would gain more choice in the property investment sector. “We welcome Ascension Properties to the exchange and hope that the listing will be another step in the successful future of this black-owned property loan stock company.”