ATLANTIC Leaf Properties intends to move to the JSE’s main board later this year, as it looks to flex its muscles in the UK property market.
CEO Paul Leaf-Wright said last week that he believed the company could attract bigger institutional investors if it had a listing on the main board. This would help it raise better funding for higher-quality assets.
The Mauritius-based property investment group raised £49.5m in capital at the beginning of the month. This brought the total funds raised since listing in April 2014 to £135m.
"This year has seen a volatile start to global capital markets, and the company’s ability to successfully complete this round of funding is a big vote of confidence from, in particular, South African property investors in the management team, and Atlantic Leaf’s strategy," he said.
The new capital raised would immediately be deployed into six UK-based assets, including three industrial properties and three commercial office properties, for a gross consideration of £107.8m, including costs.
"New debt, representing 55%-60% loan to value, has been negotiated on attractive terms. These properties have low credit risk, single-tenant occupation and long unexpired lease terms, consistent with the overall investment philosophy," Mr Leaf-Wright said.
Atlantic Leaf’s primary listing is on the Stock Exchange of Mauritius. It has a secondary listing on AltX.
Grindrod Asset Management chief investment officer Ian Anderson, who participated in the capital raise, said he was impressed with Atlantic Leaf.
"We did participate in the private placement, which was done at net asset value and a small discount to the current share price. Importantly, the shares were issued at a forward yield just below 8% in pounds, which is attractive relative to other offshore property companies in SA," he said.
"The new capital will be used to acquire a £158m property portfolio, which will provide critical mass and allow Atlantic Leaf to move its listing from the AltX, to the main board of the JSE."
Mr Leaf-Wright also said that he planned to grow Atlantic Leaf’s asset base to £500m over five years.
Some investors were wary of the intense competition in the UK listed property market.
But Maurice Shapiro, portfolio manager at Ma’alot Investments, said: "I would recommend patience among investors who buy them, as they offer a rand hedge and the opportunity for upside as they grow and are more closely followed by institutional investors."