UK hotel property company raises R254m prior to JSE's AltX listing

International Hotel Group Limited (IHG) CEO Helder Pereira said the company would expose South African investors to high-quality hotel assets in an uncomplicated property company structure.

UK hotel-focused company, International Hotel Group Limited (IHG) raised about R254m (£12.35m) last week prior to its JSE's AltX listing.

The Fund placed 12,350,000 of its shares with invited investors at an issue price of £1 per private placement share.

IHG which is set to list on the JSE this week, is looking to become a £200m net asset value property company in the next three years, says CEO Helder Pereira.

A number of property funds based abroad are taking up secondary listings on the JSE as they look to widen their shareholder bases and raise capital.

IHG will raise another £20m in the near future.

The company will have a primary listing on the Luxembourg Stock Exchange and a secondary listing on the JSE’s AltX.

The invited investors could apply for private placement shares to be listed on either the European share register or the South African share register.

Mr Pereira said the company would expose South African investors to high-quality hotel assets in an uncomplicated property company structure.

“We are giving South Africans a good opportunity to benefit from top hotel assets’ good performances. We are a strong rand hedge investment for them,” he said.

Mr Pereira is also CEO of the Redefine BDL Hotel group, a hotel management company.

Redefine has a 25% interest in the group. IHG will have £16m worth of assets.

IHGL will lease out the hotels and give management contracts to clients, one of which will be Redefine BDL Hotel Group.

Mr Pereira said IHG would be structured simply as complicated property structures had struggled in the past.

Hospitality Property Fund was the first hotel asset specialised group to list on the JSE. It is a real estate investment trust and by definition pays out the majority of its income to shareholders. However, it has battled to do so given a struggling tourism industry.

It previously had an A and B dual-unit share structure, which it has subsequently decided to abandon. The units had catered for different risk appetites, but the holders of B units found themselves receiving decreasing distribution payments.