The capital raise, which took place towards the end of 2018, was fully subscribed, in terms of which 4.5 million new ordinary shares were issued to participants, resulting in Heartwood Properties’ shareholder base increasing materially.
Heartwood Properties CEO, John Whall, reveals this was not a public offer but rather a private invitation to specifically selected individuals to submit subscription offers in order to raise capital to fund future developments, in particular the Soleil commercial property development project in Bryanston, Johannesburg. “Our objective was to grow the net asset value on the balance sheet and provide retail cash for this new development,” he says.
Heartwood Properties’ property investments have all experienced significant organic growth during the past few years. This has been achieved, says Whall, by consistently applying quality value-added principles which has seen the company’s property portfolio grow from an asset base of R52.6 million in February 2014 to R120 million in August 2018.
According to Whall, the company will utilise its status as a listed company to continue to raise capital from the market for future developments as and when they are rolled out, which is anticipated to further grow the company’s shareholder base.
Heartwood Properties’ shareholders are primarily high net worth individuals with an interest in commercial and industrial property investments.
Its four largest shareholders own more than 75% of the group. Since listing on the exchange operated by 4AX during March 2018, most shareholders have held onto their shares resulting in very little trade taking place. Whall is, however, confident that the company’s strategy of undertaking multiple development-based capital raises (which may also include the company using its shares as acquisition currency) will result in an increased liquidity in the company’s shares.