Spear shareholders support Western Cape growth plans with R254m capital raise

Quintin Rossi, CEO of Spear REIT Limited.
Quintin Rossi, CEO of Spear REIT Limited.

Spear REIT Limited has successfully concluded a capital raise of R254 million.

The strong support from Spear shareholders through this capital raise further endorses management’s view that the Western Cape is the investment case for the rest of South Africa. This raise will further bolster Spear’s balance sheet and fund accretive new Western Cape acquisitions for the company in line with its strategy“, comments CEO, Quintin Rossi.

The group has previously communicated its certain key objectives which include, among others, its strategy to reduce its loan-to-value (LTV) to within a range of 38% – 43% and to further narrow its portfolio composition to high quality logistics, industrial and convenience retail assets.

Off the back of the successful capital raise and the imminent disposal of the Double Tree by Hilton Cape Town prior to yearend February 2022, Spear will operate with a sub-40% loan-to-value. The REIT will also take transfer of 27 Junction Road, in Parow, Cape Town, a 11 500m2 industrial property which has been let to a blue-chip client on a triple net lease. This new acquisition will add further long dated industrial net income to Spear’s portfolio in addition to contributing to group earnings.

Spear remains the only regionally focused REIT listed on the JSE with a ‘Western Cape only’ investment focus. Its current portfolio is valued at close on R4.6 billion with 55% of its current portfolio classified as industrial (96.83% occupancy).

The Western Cape has been flagged as the forerunner in the pandemic recovery as the effects of semigration play out in a positive way across the province.

We have great growth plans for the company to build a meaningful and regionally focussed mid-cap REIT, but our focus remains on growing our group cashflows, maintaining high percentage occupancy rates, operating with a strong balance sheet, and delivering consistent and credible results. Quality over quantity remains one of our mantras”, concludes Rossi.