Solid growth in In­ge­nu­ity’s as­sets

Prop­erty in­vest­ment com­pany builds its port­fo­lio with a string of land­mark ac­qui­si­tions

Weekend Argus (Saturday Edition) - - PROPERTY - SATUR­DAY

PROP­ERTY in­vest­ment and de­vel­op­ment com­pany In­ge­nu­ity Prop­erty In­vest­ments lifted head­line earn­ings a share by 25 per­cent to 2c for the year end­ing Au­gust 31, de­spite a greater num­ber of shares in is­sue.

In the year un­der re­view, d u r i n g whi c h I n g e n u i t y achieved a solid 69 per­cent growth in its core as­set base to R1.3 bil­lion, the com­pany com­pleted a num­ber of de­vel­op­ments, in­clud­ing News­pa­per House and the At­lantic Cen­tre in the Cape Town CBD and Glacier Place, the third build­ing on the San­tam cam­pus in the Tyger Val­ley precinct.

It also made some sig­nif­i­cant ac­qui­si­tions dur­ing the year and into the new fi­nan­cial year. Th­ese in­cluded the Dreyer Street prop­erty in Clare­mont, for R82 mil­lion, and a port­fo­lio of eight prime in­vest­ment prop­er­ties and a 67 per­cent stake in the Palmyra Junc­tion shop­ping cen­tre in Clare­mont for a com­bined R863m.

Oth­ers were the South African Rev­enue Ser­vice build­ing at 17 Lower Long Street for R47m; Cham­ber House in Cape Town for R18.5m; and 64 White Road Re­treat for R124.5m.

Th­ese trans­ac­tions will take the value of the as­set base to more than R2.3bn.

Chief ex­ec­u­tive Arnold Maresky says that In­ge­nu­ity’s strate­gic ob­jec­tive is the de­vel- op­ment and ac­qui­si­tion of qual­ity Western Cape prop­er­ties with at­trac­tive and grow­ing in­comes and de­vel­op­ment po­ten­tial.

“Over the past five years, we have fo­cused on the de­vel­op­ment and re­de­vel­op­ment of older sites. The re­sult of th­ese ac­tiv­i­ties, to­gether with the strate­gic ac­qui­si­tions in re­cent years, pro­vide a solid base and de­fen­sive un­der­pin for the com­pany. Achieve­ments, par­tic­u­larly since the year-end, have bol­stered In­ge­nu­ity’s prospects.”

This has al­lowed the com­pany to in­crease the div­i­dend to 1.5 cents a share, Maresky says.

Bor­row­ings re­main at con­ser­va­tive lev­els, with the gear­ing ra­tio at 52 per­cent (last year 46 per­cent), which is ac­cept­able given the de­vel­op­ment na­ture of the com­pany and that it seeks to max­imise growth by lever­ag­ing its core as­set base.

Maresky says a suc­cess­ful cap­i­tal- rais­ing ex­er­cise was con­cluded af­ter the year-end wit h ma­jor i nst i t ut i o nal in­vestors, in which 156.5m shares were is­sued at 80c each. The pro­ceeds will be used to re­duce debt and fund growth.

The board has de­cided to con­vert the com­pany to a real es­tate in­vest­ment trust, which it aims to im­ple­ment dur­ing t h e 2 0 1 4 f i n a n c i a l y e a r, Maresky says.

RE­VAMP: In­ge­nu­ity Prop­erty In­vest­ments bought News­pa­per House in Cape Town’s cen­tral busi­ness dis­trict.

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