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Visual aims high with JSE's AltX listing

May 23 2014 18:14
Michel Pireu
Johannesburg - Visual International Holdings listed on the AltX of the Johannesburg Stock Exchange on Friday.

The listing provides the opportunity for investors to share in the benefits of developing complete, mixed-use residential suburbs for the middle-income market – the fastest growing residential property market segment in South Africa.

“We have been doing what we are doing now, for the better part of 12 to 14 years,” said CEO Charles Robertson.

“Even during the past financial crisis we have been able to make a profit”.

Visual had grown its assets to around R126.5m by October 2013.

“The market cap is very close to net asset value,” said Robertson. “The properties on our books have been very conservatively valued.”

That includes more than 70 000sqm of developable bulk that is ultimately expected to produce a real estate investment of around R2bn.

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Visual is listing on a PE ratio of between of four to five, which is certainly cheap given the expected growth.

According to Robertson:  “The mid-income market – those earning between R15 000 – R30 000 per month - is one of the best places to be right now. We’re growing at about 20% per annum and we expect to keep growing at that sort of rate for the next couple of years.”

Visual derives its income from different sources, including rental (it keeps about 15% of the properties it develops) management income and development profits - the latter being the biggest income component.

The group intends to use the capital raised through the listing to fast-track its plans at its flagship Stellendale Village development in Kuils River, Cape Town.

“We are selling units at Stellendale Village faster than we are able to develop them,” said Robertson.

“The listing 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.”

Robertson also told Fin24 that working with partners is an important component of the group's business model.

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