Strong demand in the UK, Atlantic Leaf reports
UK-invested Atlantic Leaf Properties has strategically positioned itself to own commercial properties in light industrial nodes in Britain and is achieving strong results.
The company grew its total dividend for the year to February by 21% and moved its South African primary listing from AltX to the main board of the JSE, according its results announcement on Tuesday.
“Light industrial properties such as warehouses are proving to be very strong assets for us.
“There is growing demand from blue-chip tenants who sell goods online,” said CEO Paul Leaf-Wright.
Atlantic Leaf grew its portfolio of industrial and office properties across the UK 51% over the financial year.
“The market in which we operate has been strong and to date largely unaffected … by Brexit. I am confident that there are good acquisition opportunities and will continue to seek out transactions,” Leaf-Wright said.
Sustained low interest rates in the UK allowed the company to leverage acquisitions at relatively low rates. About 74% of the debt has been hedged with interest-rate swaps.
Since it moved to the main board of the JSE in November 2016, new transactions were completed, which led to forecast earnings being revised upwards to 9p per share for 2017-18.
“Management remains of the view that this forecast is achievable in the year ahead, which would see growth of at least 6% in the group’s target distribution for 2017-18,” the company said.
Listed property analyst at Stanlib Lawrence Koikoi said Atlantic Leaf had exhibited strong deal-making skills.
“The company has grown strongly since listing, demonstrating the good deal-making skills of management. Dividend per share growth for 2017 was impressive at 21% in pound sterling, mainly driven by acquisitions made during the year.
“However, there seems to be organic growth on the cards given that management is guiding [a] 4.7% increase in dividend per share for 2018 achieved without any acquisitions and disposals,” Koikoi said.