Spear REIT has successfully completed an equity capital raise of R457.75 million via a vendor consideration placement.
The vendor consideration placement will allow the issuance of 50,302,197 new shares to public shareholders at an issue price of R9.10 per share. The equity placement was completed at a 1% discount to Spear’s 30-day volume-weighted-average-price (VWAP), being R9.19 per share before the 13th of September 2024. The listing and issuance of the new shares are expected to commence at 09:00am on Monday, the 23rd of September 2024.
“Spear has remained laser-focused on building a high-quality, regionally centred real estate portfolio that consistently generates sustainable cashflows and profitability. The proceeds of Spear’s vendor consideration placement will be put to work to generate a mission-statement-aligned return for all stakeholders after the implementation of the new portfolio acquisition along with seeking out attractive portfolio growth opportunities within the region,” affirms CEO of Spear REIT, Quintin Rossi.
Spear is on the cusp of implementing its R1.1146 billion acquisition of a thirteen-asset Western Cape-only portfolio from the Emira Property Fund, which will see its assets under ownership increase to R5.3 billion on the implementation date. The acquired assets constitute a diversified portfolio of 93 500m2 comprising high-quality industrial, medical retail and commercial offices in attractive and well-established Cape Town nodes. Following the new portfolio acquisition, management will continue to seek incremental investment and development opportunities, while also exploring diversified portfolio options within the Western Cape, that are in line with its investment strategy.
The proceeds of the vendor consideration placement will be utilised to settle short-term debt obligations and replenish the revolving credit facility emanating from the Category 1 transaction once implemented.
Spear’s loan-to-value (LTV) ratio following the vendor consideration placement and the implementation of the new portfolio acquisition by the end of October 2024 will be between 33% and 34%. Beyond the transfer date of the new portfolio acquisition Spear’s strong balance sheet will provide sufficient headroom for transactional opportunities for management to act as and when the need arises.
The company recently held its pre-close presentation for HY2025 which showed its consistent Western Cape performance, a contraction in vacancies thanks to strong leasing momentum, and positive rental reversion rates on a portfolio level.
