Octodec raises R390 million to support R1 billion development pipeline
JSE listed REIT Octodec, successfully raised R390 million through an accelerated bookbuild which was significantly oversubscribed.
The capital raised will be used to partially fund the company’s R1 billion current development pipeline which includes significant developments in the Tshwane and Johannesburg inner cities.
Jeffrey Wapnick, Octodec MD, commented: “Our stronger balance sheet has enabled us to undertake larger developments of 300 to 400 residential units that will contribute to the renewal of the Tshwane and Johannesburg CBDs where the bulk of our properties are situated.
“The focus of these developments is largely on the residential sector which has proven to be resilient in tougher economic conditions, as demand for quality accommodation continues to outstrip supply.”
Java Capital acted as sole bookrunner for the bookbuild. 15 918 367 shares were placed with qualifying investors at an issue price of R24.50 per share.
Anthony Stein, Octodec Financial Director, said: “We welcome our new investors which have enhanced our shareholder spread. The support received demonstrates the confidence in our hands-on management style and proven track record to unlock value through the development of existing properties in our portfolio.
“This successful capital raise will also reduce our loan to value (LTV) level in line with our target of below 40%.”
The new shares are expected to list and trade from the commencement of business on 22 July 2015.
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NOTES TO EDITORS
- Octodec is a Real Estate Investment Trust (“REIT”) listed in the “Real Estate Holdings” sector of the JSE Limited (“JSE”) and invests in the retail, industrial, office and residential property sectors. Following the merger effective 01 September 2014, Premium Properties and IPS Investments became wholly owned subsidiaries of Octodec with the combined portfolio comprising 320 properties mostly located in the Tshwane and Johannesburg CBDs and valued at approximately R10,9 billion.
- Jeffrey Wapnick, the Managing Director of Octodec Investments since 1998, is responsible for the effective management of the company with a strong emphasis on the upgrades and redevelopment of properties. He holds various other directorships of unlisted companies including IPS Investments Proprietary Limited, Premium Properties Limited and City Property Administration Proprietary Limited where he is the managing director. He is a member of the risk and investment committees of Octodec Investments Limited.
- The Wapnick family has a long history of experience in the property industry and holds a significant stake in Octodec, aligning their interests with those of minority shareholders. Management have played an integral role in the running of the portfolio for over 15 years and therefore has an intimate knowledge of every asset and solid relationships with tenants. The companies along with City Property, as the property and asset manager, are focused on and committed to the continued investment into the Johannesburg and Tshwane city centres because of the higher yield and growth potential.