Spear, a Real Estate Investment Trust (REIT) focused on investing in real estate within the Western Cape region, said on Monday that it had successfully completed an equity capital raise of R457.8 million via a vendor consideration placement.
This announcement follows the recent unconditional status of the acquisition of the Emira Western Cape portfolio, adding further impetus to its Western Cape-only-focused growth strategy.
The vendor consideration placement will allow the issuance of 50302197 new shares to public shareholders at an issue price of R9.10 per share. This equity placement was completed at a 1% discount to Spear's 30-day VWAP, (volume-weighted average price), being R9.19 per share before September 13, 2024.
The listing and issuance of the new shares was expected to start on Monday, September 23, at 9am.
Spear REIT CEO Quintin Rossi said, "The proceeds of Spear's vendor consideration placement will be put to work to generate a mission-statement-aligned return for all stakeholders after the implementation of the new portfolio acquisition along with seeking out attractive portfolio growth opportunities within the region."
Spear also said it was on the cusp of implementing its R 1.1 billion acquisition of a 13-asset Western Cape-only portfolio from the Emira Property Fund, which would see its assets under ownership increase to R 5.3bn on the implementation date.
“The proceeds of the vendor consideration placement will be utilised to settle short-term debt obligations and replenish the revolving credit facility emanating from the Category 1 transaction once implemented,” it said.
Spear's loan-to-value following the vendor consideration placement and the implementation of the new portfolio acquisition by the end of October 2024 would be between 33% and 34%.
“Beyond the transfer date of the new portfolio acquisition Spear’s strong balance sheet will provide sufficient headroom for transactional opportunities for management to act as and when the need arises,” it said.
Management said it remained optimistic that its growth strategy through acquisitions and developments, including a clear and implementable renewable energy and water continuity strategy, would enable Spear to grow its portfolio value in an income-accretive manner within the Western Cape towards becoming a meaningful mid-cap SA REIT.
Spear will announce its half-year 2025 operational and financial results for the six months ending August 2024 on October 24.
By 1pm, the shares of Spear were up 1.05% at R9.65 on the JSE on Monday afternoon.
BUSINESS REPORT