Why WestProp wants VFEX listing
NDAMU SANDU
Real estate developer WestProp is raising US$30m from new shareholders on course to listing on the Victoria Falls Stock Exchange (VFEX) as it seeks to speed up the completion of pipeline projects.
The property development and management company announced this week that it would list on VFEX on April 28. It will offer 1m ordinary shares at US$10 each and 5.4m preference shares at US$5 per share.
In a prospectus released on Monday, WestProp said it required additional resources to supplement the pre-sales of pipeline developments.
“This will minimise project risks associated with cost escalations and will resultantly have a positive impact on the issuer’s profitability and a higher return on investment for providers of capital,” it said.
WestProp’s pipeline projects include Millennium Heights in which it would sink US$2.125m on common area amenities (both sport and recreational) and bulk infrastructure services to include access roads, storm water drainage as well as bulk water and sewer reticulation and related services and the completion of Block 4, which is currently under construction. It also requires US$500,000 for amenities at Pokugara Residential Estate.
WestProp wants to develop Millennium Office Park (pictured), which will see the construction of six office blocks with a total gross leasable area of circa 33,000sqm at a cost of US$2m.
The real estate developer requires US$10m to commence construction on the first phase of Mall of Zimbabwe, anticipated to be the largest single retail shopping mall investment in Zimbabwe.
WestProp says it requires US$4m for infrastructure services for the second and third phases at Pomona City for the Phase 2 & 3 infrastructure services.
It has aside a budget of US$10m for Warren Hills Golf Estate. The Estate will encompass a 5-star luxury hotel and conference centre, retail shops, office park, club house facilities for the enhanced/ upgraded golf course and an exclusive residential estate of modern contemporary style villas, luxury apartments, townhouses and an attached retirement section with health and medical facilities. The project will start with the residential estate.
It has set aside a budget of US$1m for the development of a 60-ha eco-park village to incorporate weirs and active and passive recreational amenities including sitting areas, running and cycling tracks.
WestProp said it was going public to “provide a quality investment alternative to domestic and international property investors, anchored on a balanced portfolio with access to developmental profits as well as property management fees and rental incomes.
It said proceeds from the initial public offering would help contribute to the increase in Zimbabwe’s housing stock and therefore reducing the country’s housing deficit and also contribute to the face-lifting of Zimbabwe’s urban landscape through the development of modern and state of the art residential and commercial real estate.
It said the listing would strengthen and diversify the company’s capital structure and give an opportunity to increase the issuer’s brand equity by enhancing its profile and prestige as a listed company.
WestProp said it was listing on the VFEX, as it was an opportunity to provide investors with securities that enjoy favourable exchange controls, lower taxation and transaction costs on a securities exchange that is in a Special Economic Zone.
It said listing on the dollar-denominated bourse would give access to a wider range of financing options for future growth such as issue of additional equity, preference shares, enhanced credit rating with banks and lending institutions and the opportunity to issue corporate bonds through the capital markets.
