Visual International Holdings has confirmed that it will list on the JSE AltX on 4 April 2014. With a market capitalization of R126,5 million and a net asset value of R70,7 million, Visual is a property development, holdings and services company that develops complete, self-contained suburbs for the middle-income market.
Through its initial public offer (IPO), which is currently open, Visual plans to raise R33 million to fast track the next phase of its residential property development plans at its flagship Stellendale development in Kuils River, Cape Town, over the next two years. The IPO will close at midday on 28 March 2014.
Visual is making 26% of its share capital available in the IPO with 66 million shares available for issue at 50 cents per share. Aspiring property owners can access an investment in Visual with a minimum of 10,000 shares or R5,000.
“By listing on the JSE AltX, Visual is bringing property investment within reach of the average citizen. It creates a more affordable and easier path to unlock the benefits of property ownership, which is inaccessible to so many South Africans on a direct ownership basis,” explains Charles Robertson, CEO of Visual International Holdings. “The nature of property is that it is a long-term investment, and as such Visual is focused on long-term value creation for shareholders.”
Robertson adds, “We would certainly like to see broad participation in the IPO and for Visual to play a role in growing the base of property ownership in South Africa beyond its current levels. This reflects the ethos of how we do business.”
Visual forecasts a two-year LT EPS of 19% per year. It plans to reinvest all profits for the first few years after listing without paying dividends. Visual’s long-term strategy is to increase the percentage of retained properties in its developments over time, from its current 15%. By doing this, the company will benefit from increased and escalating annuity income as well as capital growth. Visual has its sights set on a JSE main board listing in time.
Visual develops mixed-use suburbs and builds quality housing for the middle market on suitable land near jobs and infrastructure in strategic high-growth nodes. Its homes and apartments range in price from R400,000 to R700,000.
“This is the fastest growing income segment in South Africa, and its demand for housing currently outstrips supply,” confirms Roberson. Supplying this market, Visual has a nil-vacancy track record over the last five years. The attractiveness of South Africa’s growing middle market is well documented with companies like Shoprite, Capitec and Curro actively targeting this market segment.
“We have found the middle-income market is not well catered for with housing right now. There is a big demand for good quality residences in communities which include schools, shops and recreation,” notes Robertson. “By listing, Visual will continue to pursue some of the many opportunities in this market segment.”
It is already doing so in its award-winning Stellendale Village development, a 22 hectare mixed-use residential suburb just off the Stellenbosch Arterial in Kuils River, Cape Town.
Stellendale will ultimately provide some 1,500 homes to middle-income households when completed. Visual International has already developed 440 homes here, with a further 63 under construction. It plans to unlock further phases of development at Stellendale Village, where Visual owns around 70,000sqm of developable bulk, including 1,000 residential opportunities, which will also feature an integrated retirement estate.