Kiriakos Anastasiadis, founder and Chief Executive Officer of Acsion
Acsion Limited, a specialist property developer and owner, today announced its intention to list on the main board of the securities exchange operated by the JSE Limited (JSE).
The JSE has granted Acsion a listing of up to 414 761 956 Shares in the “Real Estate” – Real Estate Holding and Development sector of the main board of the JSE, under the abbreviated name “Acsion”, share code “ACS” and ISIN ZAE000198289. The listing is subject to Acsion confirming to the JSE that the Restructure Transaction has been implemented, which is expected to occur shortly before the listing date of 9 December 2014.
Kiriakos Anastasiadis, founder and Chief Executive Officer of Acsion said: “We are very excited about this listing, which marks the next evolution in our quest for growth. We have a 17 year history of identifying and extracting value from development opportunities.
“Our track record speaks for itself and we have increased Acsion’s net asset value by more than 100% per year over the past 10 years.
“This listing will provide investors with a unique opportunity to participate in sustained capital growth prospects and invest in a specialist property developer and owner on the exchange.”
Acsion intends to raise a maximum of R200 million by means of an initial private placement with institutional and qualifying retail investors as well as clients of selected stock broking companies. The offer opened on Thursday, 20 November 2014 and closes on Friday, 28 November 2014.
The company is offering 19 801 980 shares for subscription at a range of between R10.10 and R10.80 per share, and at the time of listing will have a total number of fully paid shares of between 413 478 495 and 414 761 956 providing a market capitalisation of at least R4,2 billion on the basis of the offer being fully subscribed.
Investec Bank Limited is Corporate Advisor, Bookrunner and Sponsor for the listing. An abridged version of the PLS was published on SENS on Thursday, 25 November 2014 and copies of the full PLS may be obtained on request.
Acsion is differentiated from Real Estate Investment Trusts (REITS) in the sector as the Company focuses on the delivery of superior net asset value (NAV) growth through NAV uplift on completed properties, new developments completed, capital profits on property developments completed for sale, and – to a lesser extent – the purchasing of existing properties.
The intention of the listing is to provide Acsion with a platform from which to accelerate future growth opportunities. Current gearing of 7% is exceptionally low for the sector, providing significant headroom for growth.
Acsion’s value engineering approach to developments enables the Company to unlock a first year development yield of 15%-20% on completion of the asset. Value engineering focuses on optimising upfront feasibility studies, planning, design and construction in an innovative and more cost-effective way, resulting in lower construction costs, without compromising on quality. Indicative of this, is Acsion’s most recent development completed in 2014 at a cost of R6 500 m2, vs the industry average of R10 000/m2 to R12 000/m2 on a comparative basis.
Acsion’s existing portfolio of mostly defensive retail assets underpins the Company’s growth ambitions. The portfolio comprises a total gross lettable area (GLA) of 188 416m2 and is independently valued at R3.2 billion. It consists of two regional malls in Gauteng (Mall@Carnival and Mall@Reds) three prominent community malls (Gauteng, Mpulalanga and Limpopo) and a light industrial development in Centurion. The weighted average lease expiry of the portfolio by GLA is 4.4 years with a very low vacancy rate across the portfolio of 4.4% (including planned vacancies) as a result of strong demand from national retailers and franchises (tenanting 89% of the GLA.)
The entire portfolio was developed and is managed by Acsion’s internalised property and asset management teams. The teams’ in-house expertise covers design overview, planning, development, project and cost management as well as leasing, allowing optimisation and cost control throughout the development stages.
“Our existing portfolio provides a stable income stream and balance sheet strength to pursue high-growth development opportunities whilst maintaining prudent gearing ratios and capital buffers. We currently have exceptionally low gearing of 7% which provides significant headroom for growth” commented, Pieter Scholtz, Chief Financial Officer of Acsion.
The fair value of the developing pipeline is currently estimated at R339.6 million, however over time it is anticipated that this pipeline will contribute approximately R865 million to the NAV of Acsion.
The current development pipeline comprising seven secured development opportunities, will differentiate the portfolio into mixed-use and specialist residential assets, with roll-out expected to take place over a three year period from listing. Projects developed for ownership include phase III of Mall@Carnival (on the back of tenant demand), Mall@Moutsiya in Limpopo, phase I of Mall@Ruimte (Centurion), Development@Benmore (Sandton) and phase I of Commercial@Ruimte (Centurion). Two projects developed for sale include Residential@Moutsiya and Hyde Park Terrace.
“We are evaluating between 20 to 30 potential value creating opportunities at any given time that will deliver further development profit and NAV uplift to shareholders, but we are very prudent in our selection process.
Whilst maintaining our retail bias, our strategy is to diversify sectorally into residential and commercial, and geographically into select southern African countries together with strong local partners,” concluded Anastasiadis.