Transcend has announced its intent to issue new equity to fund the R1.27bn acquisition of eight properties, which will effectively double its portfolio value to R2.5bn, taking it from from 13 properties to 21 properties, and increasing its residential units from 2,472 to 4,631. At the same time, it will realign its capital structure.
Emira has provided an immediate R45.9m equity injection into Transcend, resulting in a 9.9% holding of Transcend’s total shares in issue. In addition, Emira has committed to advance between R290m and R395m of funding for Transcend’s planned property acquisitions in the next 18 months and has signed an irrevocable commitment for between 25.1% and 34.9% of Transcend’s total shares in issue, effectively underwriting Transcend’s portfolio acquisition.
Transcend joined the JSE AltX in December 2016 and intends to migrate to the Main Board in due course. It invests in specialised residential property assets. It currently owns 2,472 units in secure estates mainly in Gauteng, as well as the Western Cape and Mpumalanga.
With its Transcend transaction, Emira’s residential property exposure is now 3.5% of its total investment portfolio. It plans to increase this to between 5% and 10% of its total assets over time.