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Abridged prospectus – opening of offer to invited investors to subscribe for shares and listing of Indluplace on JSE
Indluplace Properties Limited
(Incorporated in the Republic of South Africa)
(Registration number 2013/226082/06)
(JSE share code: ILU)
(ISIN: ZAE000201125)
(“Indluplace” or “the company” or “the group”)
ABRIDGED PROSPECTUS – OPENING OF OFFER TO INVITED INVESTORS TO SUBSCRIBE FOR
SHARES AND LISTING OF INDLUPLACE ON THE JSE
Abridged prospectus relating to:
- a private placement (“the private placement”) to raise up to approximately R400 million by way of an offer for
subscription to invited investors for up to approximately 40 million shares in the company (“private placement
shares”) at an indicative issue price of R10.00 per private placement share; and
- the subsequent listing in the “Residential REIT’s” sector on the Main Board of the JSE Limited (“JSE”) of all
the ordinary shares of the company (“listing”).
This abridged prospectus is not an invitation to the general public to subscribe for shares in Indluplace. It is
issued in compliance with the Listings Requirements and the Companies Act, 2008 for the purpose of providing
information to the public regarding Indluplace and to provide information to select investors with regards to
the private placement.
Invited investors will be contacted by and will receive application forms to participate in the private placement
from the bookrunners.
This announcement contains the salient information in respect of Indluplace, which is more fully described in the
prospectus (“the full prospectus”) which will be made available to invited investors from today and a copy of which
was registered with the CIPC on Friday, 29 May 2015 in terms of the Companies Act, 2008. For a full appreciation
and understanding of Indluplace, the private placement and the listing, the full prospectus should be read in its
entirety.
Terms defined in the full prospectus bear the same meaning in this abridged prospectus.
1. Introduction
Indluplace will be the first Residential REIT to be listed on the JSE. The JSE has granted Indluplace a listing, in
terms of section 13 of the Listings Requirements, of up to approximately 175 793 640 shares in the “Residential
REIT’s” sector of the JSE, in terms of the FTSE classification, under the abbreviated name: “Indlu”, JSE share
code: “ILU” and ISIN: ZAE000201125, with effect from the commencement of trade on Friday, 19 June 2015,
subject to the company having satisfied the Listings Requirements regarding the spread of public shareholders.
2. History and nature of the business
Indluplace’s focus will be on owning and growing a substantial residential property portfolio from which it will
pay distributions to its shareholders. Listed residential property comprises over 13% of the total listed property
market in a developed economy such as the USA. In South Africa, it is under 2% and Indluplace believes that
there exists an opportunity for significant growth in this sector of the real estate market.
Indluplace, directly and through its subsidiaries, holds a portfolio of 95 residential properties across South
Africa.
Indluplace was incorporated as a public company on 3 December 2013. The company’s financial year end is
30 September.
3. Investment and growth strategy
The company will continue to grow its portfolio aggressively through acquiring yield enhancing properties and
portfolios that provide income from the first day of acquisition. Investments in residential rental properties
nationally will focus on affordable housing where a proven demand exists, generally in larger urban centres
close to work opportunities and transport infrastructure. Other residential forms such as student housing or
higher income housing will be evaluated on a case by case basis.
The company will utilise specialist outsourced property managers for the appropriate portfolios.
4. Prospects
The board is confident that the group will grow the portfolio substantially over the next few years. There is
currently a shortage of affordable, well managed rental housing as evidenced in the relatively low vacancy rates
in this market. Similarly good demand exists for affordable student accommodation. The group aims to position
itself as an exit for developers or owners of residential stock or portfolios.
5. Directors
Name and age Gerald George Leo Leissner (73)
Business address 2nd Floor, 18 Melrose Boulevard, Melrose Arch, Johannesburg, 2196
Qualification CA(SA)
Position Chief executive officer
Name and age Petrus Carel de Wit (48)
Business address 2nd Floor, 18 Melrose Boulevard, Melrose Arch, Johannesburg, 2196
Qualification BSc Building Science
Position Financial director
Name and age Imraan Ebrahim Suleman (43)
Business address 2nd Floor, 18 Melrose Boulevard, Melrose Arch, Johannesburg, 2196
Qualification BCom (Hons) Acc, CA(SA)
Position Executive director
Name and age Mark Jonathan Kaplan (34)
Business address 2nd Floor, 18 Melrose Boulevard, Melrose Arch, Johannesburg, 2196
Qualification BBusSc, Finance (Hons)
Position Executive director
Name and age Gregory Stephen Kinross (42)
Business address 27 Fricker Road, Illovo, Johannesburg, 2196
Qualification BCom, B.Acc. CA (SA)
Position Independent non-executive director (Lead independent non-executive director)
Name and age Taffy Monty Adler (64)
Business address 2nd Floor, 18 Melrose Boulevard, Melrose Arch, Johannesburg, 2196
Qualification BA, BPhil in African Studies, MSC in Building Science
Position Non-executive director (Chairman)
Name and age Selwyn Noik (68)
Business address 2nd Floor, 18 Melrose Boulevard, Melrose Arch, Johannesburg, 2196
Qualification CA (SA)
Position Non-executive director
Name and age Clifford Lawrence Abrams (45)
Business address 29 West Street, Houghton Estate, 2198
Qualification BCom, B Acc, CA(SA), Registered auditor
Position Independent non-executive director
Name and age Ayesha Rehman (64)
Business address 17 Melia Road, Blairgowrie, Randburg
Qualification Diploma in Financial Accounting, Certificate in Management, Certificate in Project
Management, Certificate in Property Development
Position Independent non-executive director
All of the directors are South African nationals.
6. Asset management
The asset management function of the group is undertaken internally by its executive management, further
details of whom is set out in paragraph 2.1 of the full prospectus.
7. Property management
The property management function of the group is outsourced on market related terms to Amorispan
Proprietary Limited, Citiq Property Services Proprietary Limited, CSI Rentals Proprietary Limited, JHI
Properties Proprietary Limited and Mafadi Property Management Proprietary Limited.
8. Summarised forecast information
Given the nature of its business, Indluplace uses distribution per share as its key performance measure as it is
considered a more relevant performance measure than earnings or headline earnings per share.
Set out below are the summarised forecast statements of comprehensive income (“summarised forecasts”) for
the 8 months ending 31 May 2015, the 4 months ending 30 September 2015 and the year ending
30 September 2016 (“forecast periods”). The summarised forecast information is based on the assumption that
the private placement is fully subscribed and that R400 million is raised through the issue of R40 million shares
at an issue price of R10.00 per share.
The summarised forecasts comprise forecast figures for the duration of the forecast periods.
The summarised forecasts, including the assumptions on which they are based and the financial information
from which they are prepared, are the responsibility of the directors of Indluplace.
The summarised forecasts have been prepared in compliance with IFRS and in accordance with Indluplace’s
accounting policies.
Forecast for the Forecast for the 4 Forecast for the Forecast for the
8 months ending months ending year ending year ending
31 May 2015 30 September 2015 30 September 2015 30 September 2016
Basic earnings per
share (cents) 36 709 000.0 26.7 86.5
Headline earnings per
share (cents) 50 580 000.0 26.7 86.5
Distribution per
share (cents) 50 187 000.0 26.6 83.8
Weighted average
number of shares in
issue 100 193 373 003 64 457 734 193 373 003
Number of shares in
issue at period-end 100 193 373 003 193 373 003 193 373 003
The figures set out above are extracted from detailed forecasts for the 8 months ending 31 May 2015, the 4
months ending 30 September 2015 and the year ending 30 September 2016 and have been reported on by the
independent reporting accountant, Grant Thornton (Jhb) Inc. The detailed forecasts, the independent reporting
accountants’ report on the detailed forecast and the assumptions on which the detailed forecasts are based, are
set out in the full prospectus.
9. Purpose of the private placement and the listing
The main purposes of the private placement and the listing are to:
- provide investors, both institutional and private, with an opportunity to participate over the long term in the
income streams and future capital growth of the company;
- enhance the liquidity and tradability of the shares;
- provide the company with a platform to raise equity funding to pursue growth and investment opportunities
in the future; and
- enhance the public profile and general public awareness of Indluplace.
10. Details of the private placement
The private placement will be constituted by the issue of up to approximately 40 million private placement
shares in the company at an issue price to be determined by demand and for which an indicative issue price of
R10.00 per private placement share has been used in the full prospectus.
The directors may increase the number of shares offered in terms of the private placement depending on the
level of demand. The board reserves the right to close the private placement early.
Applications in terms of the private placement must be for a minimum of 50 000 private placement shares and
in multiples of 1 000 private placement shares thereafter.
The private placement shares issued in terms of the full prospectus will be allotted subject to the provisions of
the MOI and will rank pari passu in all respects including distributions, with all existing issued shares in the
company.
There are no convertibility or redemption provisions relating to any shares.
The private placement shares will only be issued in dematerialised form. No certificated private placement
shares will be issued.
No fractions of private placement shares will be offered in terms of the private placement.
The private placement is open to invited investors only. The following parties may not participate in the private
placement:
- any person who may not lawfully participate in the private placement; and/or
- any investor who has not been invited to participate; and/or
- any person acting on behalf of a minor or deceased estate.
11. Salient dates and times
2015
Opening date of the private placement (09:00) on Wednesday, 3 June
Closing date of the private placement (12:00) on Wednesday, 10 June
Results of the private placement released on SENS on Thursday, 11 June
Notification of allotments to successful invited investors on or from Thursday, 11 June
Results of the private placement published in the press on Friday, 12 June
Accounts at CSDP or broker updated and debited in respect of dematerialised
shareholders on Friday, 19 June
Listing of shares and the commencement of trading on the JSE (09:00) on
Friday, 19 June
Notes:
1 All references to dates and times are to local dates and times in South Africa. These dates and times are
subject to amendment. Any such amendment will be released on SENS and published in the press.
2 Invited investors must advise their CSDP or broker of their acceptance of the private placement in the
manner and cut-off time stipulated by their CSDP or broker.
3 CSDP’s effect payment on a delivery-versus-payment basis.
12. Application of proceeds
The proceeds of the private placement will be applied as follows:
- to partially settle interest-bearing borrowings; and
- to settle the preliminary and issue expenses.
13. Condition to which the private placement and the listing are subject:
The private placement and the listing are subject to the achievement of a spread of shareholders acceptable to
the JSE, being a minimum of 20% of the issued share capital of the company being held by public shareholders
to ensure reasonable liquidity. It is expected that, pursuant to the private placement, this requirement will be
met.
If the condition precedent fails, the private placement and any acceptance thereof will not be of any force or
effect and no person will have claim whatsoever against Indluplace or any other person as a result of the failure
of the condition.
14. Availability of the full prospectus and the investor presentation
Copies of the full prospectus and the document presented to invited investors (“investor presentation”) may be
obtained between 08:30 and 17:00 on business days from Wednesday, 3 June 2015 to Friday, 19 June 2015 at
the following places and on the company’s website: www.indluplaceproperties.co.za. The investor presentation
contains no material or significant information over and above that contained in the full prospectus.
Indluplace Properties Limited
2nd Floor, 18 Melrose Boulevard, Melrose Arch, Melrose, 2196
Java Capital Trustees and Sponsors Proprietary Limited
6A Sandown Valley Crescent, Sandown, Sandton, 2196
Computershare Investor Services Proprietary Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001
Corporate advisor, sponsor and bookrunner
Java Capital
Independent reporting accountants and auditors
Grant Thornton
Attorneys
Cliffe Dekker Hofmeyr
3 June 2015
Date: 03/06/2015 08:55:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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