Kiriakos Anastasiadis, founder and Chief Executive Officer of Acsion
Acsion Limited, a specialist property developer and owner, today successfully listed on the main board of the Johannesburg stock exchange (“JSE”), becoming the first property fund to offer investors exposure to 100% of its development company.
The first trade opened at R10.80, giving Acsion a market cap of R4,265 billion.
Kiriakos Anastasiadis, founder and Chief Executive Officer of Acsion said: “This listing marks the next chapter in our growth path and paves the way for us to achieve our objective of doubling Acsion’s value in the next five years.
“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. Going forward we are comfortable with achieving 20 to 25% growth per year over the next four years.
“We can proudly say that we uniquely offer investors access to 100% of development profits. We have a 17 year history of identifying and extracting value from development opportunities and with our approved pipeline currently amounting to almost R1 billion with many future opportunities, we look forward to continuing on this trajectory.
“We have a stable income stream and strong balance sheet with exceptionally low gearing of 7% which provides scope for internally funded growth. We also currently have access to debt facilities in excess of R1.5 billion which is sufficient to fund medium term pipeline growth to support our objective of delivering superior NAV uplift for investors.”
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.
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.
“Our unique value engineering approach allows us to unlock a first year development yield of between 15%-20% which is our key principal requirement to invest in a specific development. We are currently looking at a number of exciting development opportunities both locally and abroad which will diversify our portfolio both geographically and by sector,“ added Anastasiadis.
The fair value of the development pipeline is currently estimated at R339.6 million, as these developments are completed, 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.
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, Mpumalanga 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.