Another Black owned JSE business listing

By on November 9, 2012

Delta Property Fund successfully listed on the Johannesburg Stock Exchange (JSE) Main Board on Friday 2nd November, under the Real Estate Holdings and Development sub-sector.

The first trade opened at R8.31 per linked unit by mid-Friday morning.

The black-managed and substantially black-owned group, which listed 119.5-million linked units at R8.20, aimed to increase its portfolio to R7-billion by 2017.

Speaking after the listing, CEO Sandile Nomvete said the company needed to grow its liquidity and size and the only way to do that was through an aggressive growth path.

Indicative of the quality of Delta’s portfolio is the high level of pre-commitments received from key institutions such as Coronation Asset Management, Stanlib Asset Management, the Public Investment Corporation, Momentum Asset Management and Grindrod Asset Management.

“The response from the institutional market was humbling. Our growth potential is underscored by the fact that the placement was significantly oversubscribed. We deliberately included private client brokers in the placement to stimulate (the) tradability and liquidity of the counter,” Mr Nomvete said.

The group said it offers access to a unique portfolio of government and South African Revenue Services (“SARS”)-tenanted buildings, providing secure income streams, large single tenant occupancy and subsequent low vacancies. Proceeds of the capital raising will be used to reduce the Fund’s overall gearing levels and fund a portion of the portfolio.

Brad Maxwell, executive head of Investment Banking at Nedbank Capital, says they are proud to have partnered with Delta Property Fund by acting as the book runner and corporate advisor to their successful listing on the JSE.

“This is a landmark listing for both Nedbank and the South African economy as it is one of the largest capital raisings on listing, in the property sector over the last decade.

“We look forward to collaborating further with Delta and seeing their business grow from strength to strength.”

Nedbank Corporate Property Finance managing executive, Frank Berkeley says the listing speaks to the expertise and level of collaboration that exists within the bank to the benefit of the client.

“Nedbank Corporate Property Finance has provided a substantial percentage of the funding for the listing, which has been positively received by investors seeking a blue-chip investment in the JSE’s property sector,” says Berkeley.

Nicky Newton-King, JSE CEO, said “The JSE is pleased to welcome Delta Property Fund to the Main Board. The growth of the number of companies in the real estate holdings and development sector has been impressive. This is the fifth company to list in the sector this year and last year there were six property-related listings.

Delta’s portfolio has been independently valued at R2.1 billion, currently comprised 20 mostly government-leased AAA- to B-grade office buildings with a total gross lettable area of 203 261 m2 and an occupancy rate of 95.2% across South Africa.

The company hopes to shift its current portfolio component of 8% retail and 92% office, to a mix of between 10% and 15% retail and 85% and 90% government-leased offices over the short term.

In the medium to long term, Delta aimed to hold a 60% government-tenanted office space and a 40% retail ratio.

The company would release its first year-end financial results under the JSE in February.



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