Mauritius-based property investment company Atlantic Leaf Properties has moved its primary listing from the AltX to the main board of the JSE under the Real Estate ‒ Real Estate Holdings and Development sector.
It will also remain listed on the Mauritius Stock Exchange.
CEO Paul Leaf-Wright this week commented that, after just more than two years in operation, Atlantic Leaf had grown sufficiently as a company to migrate to the main board.
“We expect this move will lead to improved trading liquidity. Our strategy to establish a portfolio of quality properties with solid leases is on track and we are well-positioned to continue to deliver strong returns to our shareholders.”
Further, Leaf-Wright pointed out that the company had a compelling investment case, as post-Brexit uncertainty and supportive fundamentals create an attractive opportunity for South African investors to invest in the UK property market.
“We foresee a cautious recovery as limited supply, a low interest rate environment and attractive yields continue to fuel the UK investment market. Despite some political and economic concerns, we see occupier and investment demand, as well as income and capital growth, continuing to show value in the industrial and logistics property sector.”
The company has expanded its investment property portfolio value to £283-million through the addition of 47 quality assets. The portfolio comprises assets in key regional nodes in the UK, each of which has long-term, single-tenant leases with blue-chip occupiers.
To fund its future growth plans, Atlantic Leaf in October raised £20-million, or about R341-million, through an accelerated bookbuild.
The proceeds of the capital raise, together with the recent sale of the Wombourne property and transaction-related debt provides the company with capacity to acquire total assets in excess of £50-million ‒ £29.5-million of which will go towards funding the acquisition of an attractive warehouse asset in Preston Brook, Runcorn, UK, tenanted by DHL Supply Chain.
This is expected to provide a return on asset in excess of 7% at the rental review in December 2019.
The property is situated in an established UK distribution hub between Manchester and Liverpool, with good access to major motorways.
Atlantic Leaf asset management head Shaun Fourie noted that the company would continue to take advantage of the UK’s attractive property and debt environment to scale and diversify its portfolio in industrial and office properties.
“[We will also] seek to provide shareholders with a growing distribution of 5% to 7% year-on-year growth against a backdrop of the UK’s low inflation of below 1% a year. Our target acquisitions all have strong underlying fundamentals which will enhance Atlantic Leaf’s overall portfolio,” he stated.
These transactions will be earnings accretive, underpinning the 2017 full-year distributions and contributing positively towards growing earnings and distributions to shareholders in 2018 and beyond.
Atlantic Leaf recently approved and declared a cash dividend of 4.2p apiece in respect of the six months ended August 31, and is currently on track to meet its forecast distributions of 8.5p for 2017 and 8.9p for 2018.