Arrowhead Properties Limited, the JSE-listed SA REIT (Real Estate Investment Trust), announced that its acquisition of all the issued units in Vividend Income Fund, was approved at the respective general meetings of the two companies today.
This is subsequent to the announcement released on SENS on 1 April 2014 stating Arrowhead’s firm intention to acquire all of the Vividend linked units it does not already own.
“We are pleased that the Vividend transaction has received the full support of both the Arrowhead and Vividend shareholders and boards. This transaction will bolster the number of assets in our portfolio to 185 and increases the total asset value to approximately R7,2 billion up from R3,1 billion in September 2013”, Imraan Suleman, Arrowhead CFO, commented.
The transaction is in line with Arrowhead’s investment strategy of only making distribution enhancing acquisitions and adds approximately R2,3 billion worth of commercial, industrial and retail properties that is complimentary to the company’s current portfolio. It also increases Arrowhead’s exposure to retail properties and the average size of each asset.
“It is not often that a listed property company is able to acquire a competitor on a yield and quality enhancing basis. The market capitalisation will grow from R2,8 billion in September 2013 to around R6 billion.
“The above factors, combined with distribution growth that is expected to outperform the sector average by at least 100% this year makes an overwhelming case for a re-rating of Arrowhead,” concluded Mark Kaplan, Arrowhead COO.