The Company, today announced that it would acquire from various sellers fifteen 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% and will be funded through debt, with the cost of funding at approximately 9% per annum.
“We are pleased with the addition of these properties to our portfolio,” COO, Mark Kaplan, commented. “We believe these properties offer good value at an attractive yield, which will enhance the earnings and growth prospects of Arrowhead.”
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 concluded.
It is expected that Arrowhead will achieve an increase of 10% in distributions to R1.11 per combined A and B unit for the year ended September 2013, i.e 60 cents for the A unit and 51 cents for the B unit.