Atlantic Leaf Properties switches primary listing to JSE

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Atlantic Leaf Properties Limited (ALP) CEO, Paul Leaf-Wrigh says after just more than two years in operation, we believe that the group has grown sufficiently as a company to migrate to the JSE’s Main Board. Atlantic Leaf Properties Limited (ALP) CEO, Paul Leaf-Wrigh says after just more than two years in operation, we believe that the group has grown sufficiently as a company to migrate to the JSE’s Main Board.

Atlantic Leaf Properties Limited (ALP), a Mauritian-based property company, says from today its company’s primary listing will move to the Main Board of the JSE.

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.

Paul Leaf-Wright, CEO of Atlantic Leaf says after just more than two years in operation, we believe that the company has grown sufficiently as a company to migrate to the JSE’s Main Board.

“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.”

The company has grown its investment properties to GBP 283 million 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 GBP 20 million (equivalent to approximately ZAR 341 million) was raised through a placing of 18,788,395 new Atlantic Leaf shares through its South African and Mauritian registers at ZAR 18.14 and GBP 1.07 respectively.
 
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.

Offshore property stocks Performance

Income-chasing investors may have been tempted to ditch SA-focused property stocks for offshore ones given their rousing performance and hard-currency earnings last year.

It wouldn’t be hard to see why, as seven of the biggest offshore property stocks on the JSE delivered total returns of more than 30%.  These long-favoured stocks by property punters include New Europe Property Investments, Capital & Counties, Capital and Regional, Rockcastle, Sirius Real Estate, Tradehold, and Atlantic Leaf.

Hitching your wagons to offshore markets was compelling given SA’s worrying state of the economy, currency weakness that boosts offshore earnings in rand terms, and low-interest rates globally.

But ten months later, offshore property stocks have emerged as the worst performers due to a stronger rand – up by 10.5% in the year to October 28. Offshore counters are more sensitive to rand movements than local property companies.

Latest figures show that about 40% of SA’s listed property sector’s earnings derive from offshore markets (mainly Central and Eastern Europe), while the sector had no offshore exposure ten years ago. More than nine offshore property companies have listed on the local bourse in the past 12 months, in what market watchers say is an insatiable appetite for offshore markets by South African investors.

A look at individual property stocks indicates that last year’s winners (offshore counters) are now losers. The biggest among the losers are UK-focused Capital & Counties (Capco) and Capital and Regional (Cap Reg), which have delivered a negative total return of 52% and 33% respectively in the year to October 25.

Latest data from Catalyst Fund Managers show that in the year to September other big losers include UK-focused Atlantic Leaf (-31.4%), owner of shopping malls in the UK Intu Properties (26.7%), Germany and UK-focused Stenprop and Christo Wiese’s Tradehold (-24.8%) – wiping all the stellar gains they made last year.

The losses of Capco, Cap Reg and other companies exposed to the UK is linked to the country’s glum economic prospects following the Brexit vote, with jittery investors aggressively selling down their stocks since June.

These jitters have also impacted the South African Listed Property Index (Sapy index), which includes the JSE’s largest 20 real estate companies. According to Stanlib, the index has delivered total returns of 9.9% in the year to October 25, well below the 15.1% amassed by bonds (ten-year government bonds). 

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Listed Property / REITs  |  Catalyst Fund Managers  |  Atlantic Leaf Properties  |  Paul Leaf-Wright  |  Brexit