| Mon 23 Jul 2001, 0:00 | | APEXHI BOOSTS PROPERTY PORTFOLIO TO R1,2-BILLION A |
|
ApexHi Properties Limited will acquire an additional 91 properties to boost
the value of its property portfolio to R1,2-billion ahead of the listing of
its 'A' and 'B' units in August 2001.
ApexHi was listed on the property loan stock sector of the JSE Securities
Exchange in March this year, and focuses on investing in high-yielding
properties, with quality tenants, a staggered lease profile that will run
into the medium term, and a high probability of lease renewals.
ApexHi joint managing director, Brian Azizollahoff says substantial
investment opportunities exist in exploiting the disproportionate difference
in the yields between properties located in prime areas, and those located
in other areas.
"The acquisition of the additional properties will significantly reduce
the fund's exposure to volatility in its current income stream, and will
provide ApexHi's portfolio with a wider geographical spread. Prior to the
acquisitions, all ApexHi's properties were located in Gauteng. The new
portfolio will comprise 106 properties, with 70% situated in Gauteng, and
the balance situated in the Northern Province, KwaZulu Natal, Free State and
the Western and Northern Cape.
"In addition, the increased market capitalisation of ApexHi will result
in an enlarged pool of unit holders, which should result in increased
liquidity and a potential re-rating of the linked units," says Azizollahoff.
The 91 additional properties will be purchased for a combination of cash
and 'A' and 'B' units. The cash portion of the purchase considerations will
be funded by way of borrowings. In terms of the ApexHi Articles of
Association, the company may borrow to a maximum of 35% of the value of the
consolidated property portfolio.
Azizollahoff says the innovative structure, which will have separate
listings for the A and B which can be individually traded, will be the first
of its kind in the sector.
The 'A' unit, issued at R6 will represent 60% of the total units in
issue, while the 'B' unit represents 40%.
The 'A' units will be entitled to 45% of the distributable income with a
minimum return of 17% on the R6 issue price. This minimum return on the 'A'
unit will therefore suit the profile of the risk averse investor.
On the other hand, the 'B' unit - issued at R4 - which is entitled to 55%
of the distributable income once the minimum return on the 'A' unit has been
satisfied, caters for investors who are prepared to take greater risk for
the potential of greater returns.
"The property sector's consistent returns have attracted increased
interest from investors of late, and we believe ApexHi now has the market
capitalisation and a unique structure to become a major player in the
market," says Azizollahoff.
Ends
