Octodec raises R390 million to fund growth

Octodec Investments MD, Jeffrey Wapnick says the focus of the developments is largely on the residential sector which has proven to be resilient in tougher economic conditions.

Octodec Investments on Tuesday announced that it had successfully raised R390 million through an oversubscribed accelerated book-build to fund property developments in progress.

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.

These units are included in four residential projects worth about R653.3m that Octodec has reported are under construction. These projects make up part of the fund’s R1bn pipeline.

“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.

Meago Asset Management director Thabo Ramushu said that the merger of Octodec and Premium Properties had allowed the new enlarged Octodec to build bigger developments.

The better corporate structure had attracted institutional investors to the company, which had previously been a family-run group with limited liquidity and tightly held group for years.