PRETORIA - The reverse JSE listing into Decillion Limited in the next couple of months, will see a new property development company enter the market with a diversified development portfolio of some R2bn.
The currently suspended Decillion revealed in a Sens announcement on Tuesday that it was in negotiations for the possible reverse listing and cautioned shareholders that the deal may have a "material effect on the price of the company's securities".
Dealmaker Marius Mostert of Stone Edge Finance says the portfolio will consist of non-listed assets put together by a group of four investors to form what he calls a "very valuable portfolio". He adds that existing Decillion shareholders stand to benefit from the proposed reverse listing, as opposed to the delisting of Decillion, if the deal was not brokered.
According to incoming Decillion director Barry Havenga, its focus won't be in areas where there is already a substantial concentration of property developments. Decillion will be looking more to underdeveloped areas with specific future growth potential.
"The portfolio is diversified across virtually all sectors, there will be some residential, some commercial, industrial and an element of leisure, but not very high," says Havenga. "We're not looking at putting up another shopping centre in Johannesburg. We're looking at areas where we won't encounter a hugely competitive environment.
"One of the developments we're looking at is very close to the new power station in Limpopo. What you've got there are developments around the power station; around the coal mine infrastructure that will supply the power station. So it will be housing and new shopping centres for these areas."
Havenga says it has also identified an area around Middleburg, based on the requirements of Eskom and the steel industry. He adds that it will be focusing its efforts on a manageable amount of developments rather than over-quantifying its portfolio.
"We're trying to avoid some of the ills that have befallen some property developers in the past, such as concentrating too much on remote golf estates, which were aimed directly at the leisure market. Considering the current economy we're also not going to have a highly geared portfolio, which will expose us to changes in the interest rate."
