Atlantic Leaf Properties moves to JSE main board

ALP will be listed in the Real Estate ‒ Real Estate Holdings and Development sector of the Main Board. The listing on the Stock Exchange of Mauritius remains unaffected.

“After just more than two years in operation, we believe that Atlantic Leaf has grown sufficiently as a company to migrate to the JSE’s Main Board and we expect that this move will lead to improved trading liquidity. Our strategy to establish a portfolio of quality properties with solid leases is on track and we are well-positioned to continue to deliver strong returns to our shareholders,” commented Paul Leaf-Wright, CEO of Atlantic Leaf.

“Our investment case remains compelling as post-Brexit uncertainty and supportive fundamentals create an attractive opportunity for South African investors to invest in the UK property market. We foresee a cautious recovery as limited supply, a low interest rate environment and attractive yields continue to fuel the UK investment market. Despite some political and economic concerns, we see occupier and investment demand as well as income and capital growth continue to show value in the industrial and logistics property sector.”

Assets in key regional nodes

The company has grown its investment properties to £283m in its period of operation by adding 47 quality assets to its portfolio. The portfolio consists of assets in key regional nodes in the United Kingdom, each of which has long-term, single-tenant leases with blue chip occupiers.

To fund its future growth plans, ALP ran a successful accelerated book build, which closed on 27 October. Strong demand from investors ensured that targeted equity of £20m (equivalent to approximately R341m) was raised through a placing of 18,788,395 new Atlantic Leaf shares through its South African and Mauritian registers at R18.14 and £1.07 respectively.

The proceeds of the capital raise, together with the recent sale of the Wombourne property and transaction related debt provides the company with capacity to acquire total assets in excess of £50m ‒ £29.5m of which will go towards funding the acquisition of an attractive warehouse asset in Preston Brook, Runcorn, UK, tenanted by DHL Supply Chain, a global logistics group with a very low credit risk and is expected to provide a return on asset in excess of 7% at the rental review in December 2019. The property is strategically situated in an established UK distribution hub between Manchester and Liverpool, with good access to major motorways.

Attractive property, debt environment

“We continue to take advantage of the UK’s attractive property and debt environment to scale and diversify our portfolio primarily in industrial and office properties while seeking to provide shareholders with a growing distribution of 5% to 7% year-on-year growth against a backdrop of the UK’s low inflation of below 1% pa. Our target acquisitions all have strong underlying fundamentals which will enhance Atlantic Leaf’s overall portfolio. These transactions will be earnings accretive, underpinning the full year 2017 distribution and contributing positively towards growing earnings and distributions to shareholders in 2018 and beyond,” noted CIO Shaun Fourie.

Atlantic Leaf has recently approved and declared a cash dividend of 4.2 GBP pence per share in respect of the six months ended 31 August 2016 and is currently on track to meet its forecasted distributions of 8.5 GBP pence for 2017 and 8.9 GBP pence for 2018.