Delta Property Fund listed on the Johannesburg Stock Exchange (JSE) Main Board on 2 November, listing 119 512 195 linked units.
Our vision is to grow the portfolio to approximately R7 billion by 2017 to ensure critical mass and liquidity, says Delta’s chief executive officer, Sandile Nomvete.
The Fund raised R980 million in pre-commitments from institutional investors and private client brokers and the first trade opened at R8.31 per linked unit, giving the Fund a market cap of R1.37 billion, based on its total number of linked units in issue.
Delta, a black-managed and substantially black-owned property loan stock company, 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.
“We are very excited about our listing on the main board and this listing is the culmination of years of hard work and also marks the start of a new growth chapter for Delta.
“Our vision is to grow the portfolio to approximately R7 billion by 2017 to ensure critical mass and liquidity,” says Delta’s chief executive officer, Sandile Nomvete.
Delta’s portfolio boasts 20 well-established, mainly AAA, A or B grade high-quality office buildings across the country in nodes attractive to various government departments and SARS.
The portfolio has been independently valued at R2.1 billion and comprises a total Gross Lettable Area of 203 261 square metres consisting of 92 percent office space and an 8 percent retail component.
Delta is externally managed by a 100 percent black-owned asset manager, which qualifies Delta for long-term government leases in terms of the provisions of the Department of Public Works.
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.
Delta Fund directors: Bruce Zungu, Ipeleng Mkhari, Sandile Nomvete, Brownyn Corbett, Jabu Mriga and JB Magwaza.
"The response from the institutional market was humbling and our growth potential is underscored by the fact that the placement was significantly over-subscribed.”
He says they deliberately included private client brokers in the placement to stimulate tradability and liquidity of the counter.
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.
He explains that their funding underscores the bank’s commitment to the listed property sector and reinforces its position as South Africa’s leading property financier.
Nicky Newton-King, JSE chief executive officer, says 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.”
Newton-King says this is the fifth company to list in the sector this year and last year there were six property-related listings.
A quality portfolio such as that of Delta provides investors with even more choice, she adds.
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