Atlantic Leaf in UK acquisition

JSE-listed Atlantic Leaf Properties has invested in a UK-based retail warehouse and industrial group in a move aimed at growing its 2018 earnings.

The Mauritian-based retail estate company has acquired 45.03% of a portfolio in a joint venture with LMP Retail Warehouse JV Holdings, controlled by a London-listed real estate investment trust.

Valued at £104.5m, the acquisition is fully leased by DFS Trading, the UK’s largest upholstered furniture manufacturer and retailer.

The transaction is expected to generate a cash-on-cash return to Atlantic Leaf of 9.33%, increasing the current year’s forecast distribution of 9p per share to 9.1p per share.

Atlantic Leaf has given guidance of growth of between 5% and 7% in dividends for the 2018-19 financial period, which, based on the current share price of about R17, translates to a forward yield of 9.5%.

To fund the acquisition, Atlantic Leaf was embarking on an accelerated book-build to raise £30m by placing new shares on the JSE, which should also broaden the company’s shareholder base, said CEO Paul Leaf-Wright.

“We continue to promise reliable, quality, pound-based income returns for South Africans, said Leaf-Wright.

“Following this deal, our gross assets will be worth about £350m, making us more relevant,” he said.