Oryx Properties Limited has agreed to acquire Dunes Mall for N$620 million.
The company says it is buying up the mall when property valuations “remain relatively depressed”, and believes “there is opportunity in the mismatch between backward-looking property valuations and forward-looking rebound in consumer confidence”.
According to the company, it is therefore “ ideally placed to understand the Namibian retail property landscape and thus capitalise on this opportunity through the expansion of its retail property portfolio”.
Expected to be the largest acquisition in the history of Oryx, the company has agreed to buy up the mall for N$620 million, although the last valuation was at N$680 million.
The company received approval to go ahead and buy up the mall by the Namibia Competition Commission in March, and has now issued a circular to its unit holders to buy up rights that will have the properties group gathering funds to buy up the mall.
According to the circular issued on Friday, Oryx is seeking to raise N$379,6 million through a renounceable rights issue to qualifying unit holders in respect of 32,6 million rights issue units in the ratio of one rights issue unit for every 2,5-linked units held at the close of trade on 23 June.
This will be at a price of N$1,161 per rights issue unit, inclusive of antecedent interest distribution of 50 cents.
If raised, the rights issue will have 60% of the capital for the acquisition through equity, and 40% through new debt.
At the moment, Oryx has a N$3-billion property portfolio and exposure to different property industry segments, and has plans to grow its asset portfolio to N$4,5 billion by 2025.
The Dunes Mall deal is appropriate for the diversification, said the company, and also includes bulk land earmarked for future development, which Oryx believes holds significant potential to further enhance the already favourable yield.
“Several interested parties have been identified for these additional developments, and these opportunities will be pursued once transfer of the Dunes Mall has occurred,” the circular reads.
The company further said the acquisition of Dunes Mall fits well within Oryx’s strategy, with a focus on geographically diversifying the portfolio and derisking Oryx’ over-dependence on Maerua Mall.
Dunes Mall is located at Walvis Bay in Erongo, and has a total gross lettable area of 32 438m2, with anchor tenants including Checkers, Pick n Pay, Game and Woolworths.
Oryx has explored the offering over the last few years and believes the yield on the current proposed purchase price makes the investment attractive and may provide further opportunities down the line as the coastal market improves.
Total capital required for the raise is at N$632,7 million, and should the rights issue be oversubscribed, the board will at its discretion restrict the accepted allocations among unit holders up to a maximum of 60% of the purchase price, inclusive of the transaction costs on the same basis as indicated in the excess applications section.
A meeting to discuss this is slated for 15 June in Windhoek, and the full circular is available on Oryx Properties’ website.
Email: lazarus@namibian.com.na
Twitter: @Lasarus_A
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