Prop­erty port­fo­lio He­riot set to list on AltX from next week

The Star Early Edition - - BUSINESS REPORT - Sandile Mchunu

HE­RIOT REIT has said that it would of­fi­cially list on the AltX next Mon­day un­der the Di­ver­si­fied Reit sec­tor af­ter the “JSE granted it a list­ing of all of its is­sued or­di­nary shares” and with its share code.

The group said its is­sued share cap­i­tal would com­prise of 255 637 135 or­di­nary shares of no par value and ap­prox­i­mately R2.55 bil­lion mar­ket cap­i­tal­i­sa­tion.

He­riot was founded by cur­rent chief ex­ec­u­tive Steven Her­ring in 1998 with the pur­pose of grow­ing a prop­erty port­fo­lio that gen­er­ated sus­tain­able long-term cash flows from blue chip tenants.

It was in­cor­po­rated and reg­is­tered as a pri­vate com­pany in April, but con­verted to a fully fledged pub­lic com­pany last month.

The com­pany’s fi­nan­cial year end is May 31.

He­riot’s in­tro­duc­tion into the prop­erty mar­ket was through the in­dus­trial sec­tor, with prop­er­ties un­der­pinned by triple net, long-term leases that fa­cil­i­tated quick growth of its as­set base. To­day, He­riot owns 20 in­dus­trial prop­er­ties val­ued at R1.58bn.

It is also now a prop­erty hold­ing and in­vest­ment com­pany that is in­vested in in­dus­trial, re­tail, res­i­den­tial, spe­cialised and com­mer­cial prop­er­ties in South Africa.

He­riot Prop­er­ties, which holds ap­prox­i­mately 70 per­cent of the prop­er­ties com­pris­ing the port­fo­lio and which is a wholly-owned sub­sidiary of the com­pany, gen­er­ated sus­tain­able long-term cash flows from blue chip tenants.

The group has grown in leaps and bounds since in­cep­tion. In 2003, He­riot Prop­er­ties di­ver­si­fied its port­fo­lio with the de­vel­op­ment of a 1 500m² re­tail cen­tre.

He­riot owns twelve re­tail cen­tres with a GLA of 119 981m² in cen­tral busi­ness districts (CBDs), town­ships and ru­ral ar­eas that fo­cus on the mass mar­ket, bring­ing shop­ping to the peo­ple.

“The cen­tres, val­ued at R2.09bn are an­chored by a high per­cent­age of na­tional tenants with long-term leases and high trad­ing den­si­ties that en­sure the sus­tain­abil­ity of He­riot’s cash flows. The prop­erty port­fo­lio fur­ther in­cludes seven of­fice prop­er­ties, in­clud­ing He­riot’s head of­fice lo­cated in the pres­ti­gious mixed-use precinct, Mel­rose Arch,” the group said.

The group also added that through its sub­sidiaries and its in­ter­est in He­riot Trust 1 and He­riot Trust 3, it owns a di­ver­si­fied port­fo­lio of 44 prop­er­ties across the re­tail, in­dus­trial and com­mer­cial sec­tors.

“The prop­er­ties are sit­u­ated in ar­eas with high growth po­ten­tial. The group’s in­vest­ment strat­egy is to pur­chase yield-en­hanc­ing as­sets that can of­fer con­sis­tent long-term rental in­come growth,” the group said.

Go­ing for­ward, the board of He­riot is con­fi­dent that it will de­liver a dis­tri­bu­tion of 72 cents a share for the year end­ing May 2018.

The board cur­rently has six direc­tors; three in­de­pen­dent non-ex­ec­u­tive direc­tors in Nel­son Ngale, Trevor Co­hen and Sel­wyn Blieden, chair­per­son Dave Friend and chief fi­nan­cial of­fi­cer Janys Finn as well the chief ex­ec­u­tive.

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