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Property developer takes the gap with AtlX listing

The target: secure lifestyle housing for the middle-income group.

Plans are afoot to raise capital worth R33 million before established Cape-based property owner and developer Visual International lists on the JSE Alternative Exchange (AltX) in February.

With property entrepreneur Charles Robertson (pictured) at the helm, the company holds a ten-year track record and asset base worth R126.5 million.

About his long term vision for an initial AltX listing before moving to the Main Board, Robertson states on the website: “Listing Visual International will provide the capital needed to pick up the pace of development, as well as reproduce our successful model in other high-growth nodes around South Africa.”

The issue of 66 000 000 new shares, at R0.50 per share is set to accelerate the new development phases at the 22-hectare mix use residential development at Stellendale Village (see photo below), over the next two years. Newly issued shares will equate to 26% of the shares in the company, with 74% held by its executive team and a Kuils River empowerment initiative.

The gap

Market trends show that sales are driven by the growing need for quality housing in a secure environment at affordable levels. Added to this is a scarcity of secure retirement lifestyle village living at affordable levels.

Early recognition of the gap in supply of secure lifestyle housing for the middle-income group has seen accelerated sales of units at its mixed-use suburb of Stellendale Village. Secure units, suited to the growing middle-income bracket, are priced from R400 000 to R700 000. He says increased demand for living within close proximity to employment opportunities, public transport and infrastructure, has resulted in a best seller.

“Right now, we are selling units at Stellendale Village faster than we are able to develop them,” he states.

Robertson says Visual’s net asset value of around R60 million comprises 80 000sqm of developable bulk which is expected to produce real estate investment of around R2 billion. Growth in earnings per share is forecast at 33.5% over two years plans, with no dividend payments, but reinvestment of all profits for the first five years instead.

New house and apartment buyers will be investing in the village within a village in Cape Town’s Northern Suburbs’ along the Stellenbosch Arterial in Kuils River. A total number of 1 500 houses are planned for Stellendale Village, with 440 houses completed, and a further 63 under construction.

Visual intends to acquire about 15% of the apartments within the precinct, which will be made available for rent.

Visual’s integrated retirement lifestyle concept, My Place at Stellenberg, will be focusing on a new, more competitively priced brand in the existing stable of products currently available in the market.

Stellendale house

Stakeholders envisage new facilities at Stellendale Village to include secure educational as well as recreational opportunities for young families, first time home buyers, and tenants. Robertson says suitable land has been identified for the building of a school with access to accommodate nine grades and about 350 children, as well as sport and administration facilities within walking distance from their homes.

The long-term vision, says Robertson, includes further development of its business model beyond Western Cape borders to Gauteng, where various strategic development partnerships are in the process.

Visual’s past performance through tough market conditions reflects property ownership of ready-zoned land, as well as ongoing development of large projects. Krastanov says the company will increase quality home ownership opportunities to the aspirational market segment, while achieving growth by retaining property within the company over the long term.

Listing opportunity

AltX Designated Advisor, Michelle Krastanov of Arcay Moela Sponsor says: “The AltX sector offers Visual, as an established property owner and developer, the ideal environment from where to fast track a sound business model.”

Visual hopes to be one of the earliest listings on the AltX board this year, to participate in the JSE’s facilitation of growth opportunities for small and medium capitalisation businesses.

Last year saw a total of eight AltX listings come to the market, the most recent property developer being GoGlobal’s listing in April last year. This fast-tracked growth opportunity has seen developer Calgro M3’s AltX performance speculated to soon become a main board listing.

From an investor perspective, the AltX offers a regulated environment, where companies participate in high standards of corporate governance, and both initial as well as ongoing disclosure of company information.

*Anna-Marie Smith is a freelance property writer in the commercial, industrial and residential sectors.

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