SA Corporate Real Estate (SAcorp), which last week proposed to acquire residential REIT Indluplace, declared a 5.5% higher distribution, to 24.15 cents per share at a 90% payout ratio for the year to December 31, over last year’s 22.89 cps at the same payout ratio.
SAcorp’s portfolio consists of 157 industrial, retail and residential properties, with 1 350 666 square metres of gross lettable area valued at R15.2 billion; a 50% joint venture interest in three Zambian entities with properties valued at R1.4bn; and, listed investments of R169 million.
Post financial year-end, the listed investment in Safari Investments RSA was disposed of for R112m .A further R400m interest rate swap agreement was entered into and a R50.9m US dollar cross-currency swap was settled. On January 26, R59.5m was received as a further South African Special Risk Insurance Association payment.
Total net property income (NPI) was slightly higher at R1.2bn, from R1.1bn for the past year. Like-for-like NPI increased 6.7% to R1.1bn. The disposal pipeline contracted, and still-to-transfer and divestments transferred since January 2022 came to R1.4bn. Loan to value was at 38.1%, versus 37.4% a year before.
SAcorp has proposed to acquire all the shares of Indluplace at R3.40 each and to delist Indluplace. The price represents a 12.8% premium to Indluplace’s 30 day average share price to March 13, when the offer was made.
If concluded, SAcorp will be one of the largest listed residential property portfolios, of 19 268 units valued at R7.9bn.
“Indluplace’s shares are illiquid and its largest shareholder, Fairvest, classifies its shareholding as non-core. To date, the Indluplace residential property portfolio has not been successful in reaching the critical mass that the listing in 2015 sought to achieve,” SAcorp’s directors said in a statement,
The deal would provide Indluplace with a liquidity event by way of a cash offer for their shares, while also enabling SAcorp to grow its portfolio in the residential sector and further its strategy of creating a larger and more diversified residential property portfolio, leveraging its existing platform.
Indluplace’s share price was trading 0.3% higher at R3.26 on Friday, having gained 8.6% over the week after the acquisition proposal was made.
SAcorp’s share price was trading 3.94% lower on Friday morning at R1.96 per share, considering the SA Listed Property Index was up 0.58% at the same time. The share price was also slightly lower from the R2 that it traded at last Monday, the day the potential acquisition was announced.
BUSINESS REPORT