15 Jan 2013
Arrowhead Properties, the only Johannesburg Stock Exchange listed property company to pay quarterly distributions, has over the past few months made significant progress in its acquisition strategy that is aimed at growing the portfolio by R660 million, for instance, 30 percent in its current financial year.
The company announced that it would acquire from various sellers 15 quality and yield enhancing office, retail and industrial properties, located in Gauteng, KwaZulu-Natal, North West Province, Free State and the Northern Cape.
The combined purchase consideration of R489 million will have an average net yield of 11 percent and will be funded through debt, with the cost of funding at approximately 9 percent per annum.
“We are pleased with the addition of these properties to our portfolio and believe these properties offer good value at an attractive yield, which will enhance the earnings and growth prospects of Arrowhead,” says chief operating officer, Mark Kaplan.
After concluding this transaction Arrowhead will own a portfolio valued at R2.9 billion with debt of R950 million.
It has trebled its market capitalisation to more than R2.4 billion since listing in December 2011.
“We intend to continue growing the portfolio, but not at the expense of yield.
“Our aim is to increase our market capitalisation to R3 billion this year,” he says.
It is expected that Arrowhead will achieve an increase of 10 percent in distributions to R1.11 per combined A and B unit for the year ended September 2013, for example 60 cents for the A unit and 51 cents for the B unit.
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