Acsion considers international move

ACSION, the listed specialist commercial and residential property developer and owner, is poised to take a decision about its first possible step towards establishing an international footprint.

Pieter Scholtz, the chief financial officer of Acsion, said yesterday that the company was in advanced discussions with parties for a proposed retail development in south-eastern Europe.

Scholtz confirmed a decision about this proposed development would be taken this week.

He said it had always been a dream for Acsion to have some international exposure, but the company was hampered in the past by not being able to do the right kind of deal.

Scholtz said if it decided to proceed with the proposed development, Acsion would replicate what it had done in South Africa. Africa growth “We like to have vacant land for development. We know for a fact that we will have our own office on site and potentially have a local partner.

“We plan to stick to our strength and will be actively involved in the development. We plan to send staff to relocate there permanently,” he said.

Acsion also has plans to expand its footprint into Africa and is investigating a proposed mall development in Maputo in Mozambique and an office development in Lusaka in Zambia.

Scholtz said an agreement had been finalised with the Mozambican Ministry of Interior to develop a shopping centre at a cost of about R650 million.

He said the Mozambican economy was now under strain and Acsion would not take any unnecessary risks but wait for the economy to recover.

“We can’t move (on the development) without local retailers moving with us,” he said.

Scholtz said Acsion’s local partner in Zambia was trying to resolve a few issues related to the proposed co-development of 20 000 square metres of office space. He stressed Acsion did not have a target for its exposure to property investments outside South Africa and approached each deal on its own merits.

Scholtz added the current value of Acsion’s South African assets was R4.1 billion but with the weakness of the value of the rand, its international assets could very quickly equal that if it did two or three developments.

Ascion’s largest development in South Africa is the 20-story Acsiopolis mixed-use development in Benmore in Johannesburg, with 60 000m2 of the 70 000m2 for residential, 5 000m2 for retail and 1 000m2 for offices.

Scholtz said this development was progressing well but delays in completing the excavations and appointing a contractor meant it would only be completed in January 2019.

However, Scholtz said the development cost had dropped to R920m from its previously estimated R1.2bn.

Acsion reported yesterday that group revenue increased by 15 percent to R247.4m for the six months to August 31, while operating profit improved by 22 percent to R151.4m. Operating expenses fell by 10 percent to R98m.

Headline earnings a share, which were impacted by a shares repurchase by the company, grew almost 23 percent to 29.71 cents from 24.18c. No dividend was declared.

Scholtz said the group remained focused on the completion of its secured development pipeline and obtaining superior net asset value growth for its shareholders. Shares closed unchanged at R8.97 on the JSE yesterday.