Stellendale Village, Cape Town
Cape Town-based property development company Visual International plans to raise R33-million to keep up with the rapidly evolving property market, Visual MD and CEO Charles Robertson said on Tuesday.
Speaking at a briefing for investors, in Johannesburg, Robertson noted that the company aimed to raise the funds through the issue of 66-million new shares at 50c a share, which would give investors a 26% stake in the company, prior to listing on the JSE AltX in March.
The minimum investment would be 10 000 shares or R5 000, which would allow Visual’s customers, the middle-income market, to also invest in the company.
Visual would use the R33-million raised to fast-track the next phase of its residential development plans at its flagship project Stellendale Village, in Cape Town.
“Visual was able to weather the difficult conditions the country, and specifically the property sector, went through over the past years. Now we are seeing the market improve and we want to broaden our capital base to [make use of] what is happening,” Robertson said.
Visual, which was valued at around R126.5-million, currently had more than 70 000 m2 of developable bulk property that was ultimately expected to produce a real estate investment of around R2-billion.
Included in the properties that would be funded by the R33-million was a retirement lifestyle estate, targeting the middle-income market.
“This estate, to be located within the Stellendale Village, will be something between a traditional old age home and an expensive retirement estate,” Roberston explained, adding that food, and hospital services would be provided on the premises.
He also emphasised that the funds raised would only be used to further the company’s existing properties and that it would look at joint ventures to acquire further properties for development.
Meanwhile, Roberston said Visual saw a definite opportunity in the middle-income market, adding that it was much broader than the high-income market.
“The middle-income market is the fastest growing income segment in South Africa. This space, which we play in, is also targeted by major companies such as Shoprite and Capitec,” he stated.
Robertson did, however, add that the majority of Visual’s target market could not afford to buy their own homes, as they could not get a bond, stating that, therefore, many of the company’s buyers were investors, who then rented the properties out.
Visual also currently retained 15% of its property, which it rented out, and planned to increase this to 50% in future, he added.