Ascension Properties Limited, a substantially black-owned property loan stock company, made its debut today on the Real Estate sector of the JSE’s Main Board. The company listed its A- and B-linked units at R3.80 and R1.90 per linked unit respectively and raised R374 million during a private placement to selected investors prior to the listing. 

Ascension currently owns a portfolio of nine office properties located in Gauteng and the Western Cape valued at approximately R524.1 million  and has entered into agreements to acquire a further eight properties, valued at R457.2 million.

CEO Ashraf Mohamed says that the acquisitions will boost the company’s initial growth and foresees both organic and acquisitive growth for Ascension. “We intend to achieve organic growth through the renovation of vacant portions of some of our existing properties with the intention to secure further anchor tenants and maximise earnings,” he explains.

Ascension is black managed and substantially black owned and aims to develop  into a multi-billion Rand fund over the next few years. The asset management function of the company is undertaken by the asset manager, whereas the property management function is outsourced on market related terms.

The initial shareholders, who will remain involved in Ascension post-listing, are an experienced team of property entrepreneurs and property managers who have identified the opportunity to acquire primarily office buildings suitably situated for  government tenants. Their objective is to take advantage of their reputable track records in the property industry, coupled with the BEE ownership, to secure long term leases with the Department of Public Works, provincial government departments and parastatals.

Assuming that the planned acquisitions are concluded next month, Ascension is expecting to report revenue of R182 million and operating profit of R125.5 million for the year ending 30 June 2012.

The proceeds of the private placement will be utilised primarily to fund the acquisition of the new  properties and to reduce debt. 

“As one of only three black managed listed property funds in South Africa, the directors anticipate that the company will continue to be in a position to take advantage of opportunities to secure long term leases with government and other empowerment sensitive tenants. As a BEE empowered listed property fund with significant liquidity, Ascension is an ideal BEE partner to other listed property funds and institutional property investors. In addition, smaller BEE players in the property sector looking to exit their government portfolios may opt to dispose of their properties to Ascension in exchange for linked units in Ascension,” concludes Mohamed.