To ensure liquidity and tradeability of units for its 450 shareholders, CBS Property Portfolio yesterday announced its intention to list on the JSE’s real estate sector on Wednesday next week.
CBS will become the 29th listed company on the listed property sector, which has a market cap of R52bn.
Derek Greenberg, executive director of CBS, enthused that the private placement of 37m CBS linked units at R6,75 ahead of the listing should raise about R250m.
“This money accrues to the company and will be used to purchase more properties for the group and reduce the gearing ratio from 58% to 43%,” said Greenberg. He added that the placement would take place over four days, opening on Tuesday and closing on Friday.
On listing, said Greenberg, assuming the private placement is fully subscribed (by various institutions that are active in our sector), there will be 80,2m CBS linked units in issue. That would value the company at R541m.
Angelique de Rauville, an analyst at Provest, was pleased that the listing would add to the critical mass of the sector.
“It also introduces new properties to the sector, unlike other listings which resulted in existing properties being transferred to the new entity,” said De Rauville.
According to Greenberg, CBS is forecasting a distribution of 69c per linked unit for the year ending-October 2006, and the resultant forward yield per linked unit would thus be 10,25%.
The management team of CBS include Martin Ettin, Derek Greenberg, Gary Fisher and Sean Mackay as executive directors.
Ettin and Greenberg were co-founders of Primegro Properties and drove its successful listing. They were later instrumental in the merger between Primegro and Growthpoint Properties where they also served as executive directors.
Greenberg said CBS has been in the market since 1993 and its linked shares have traded successfully for the past two years, facilitated by Barnard Jacobs Mellet Private Client Services through their Over The Counter (OTC) market.
Mackay pointed out that awareness of the sector has increased. Average value traded improved by 88% from R5,3bn for the 12 months to June 2004 to R10,1bn for the 12 months to June 2005.
“As a team of executive directors we are all personally invested in the future and the success of CBS Property Portfolio and strive to deliver sustainable and growing income streams to investors,” said Ettin.
Greenberg disclosed that CBS would list with property assets valued at R1bn, comprising 28 properties with a total of 190,475m2 space and strong representation in both the Western Cape (42%) and Gauteng (35%) with the remainder in KwaZulu Natal.
Investec is the investment bank and lead sponsor to the CBS listing and Barnard Jacobs Mellet Corporate Finance is acting as a co-sponsor.
This story first appeared in Moneyweb Business in the Citizen
