The JSE will welcome the second entrant to the local equities market this year with the secondary listing of UK-based Primary Health Properties (PHP) next week as the local bourse seeks to reverse a wave of departures in recent years.
The listing will see 1.34-million PHP shares available at 12.5p (R2.87) each from October 24.
PHP, a real estate investment trust (REIT), invests in primary healthcare properties in the UK and Ireland on long-term leases and generates almost 90% of its rental income from government bodies such as the National Health Service (NHS) in the UK and Ireland’s Health Service Executive (HSE) in Ireland, according to the group’s prelisting statement on Tuesday.
The company listed on the London Stock Exchange (LSE) in 1998, where it is now valued at about £1.22bn (R28bn), and became a REIT in 2007. Its current portfolio comprises 514 properties, valued at £2.8bn, of which 20 are in Ireland.
Among the reasons PHP gave for coming to SA is to raise capital to fund acquisitions and diversify its shareholder base.
“PHP aims to operate in a relatively low-risk environment to generate progressive returns for shareholders through a combination of earnings growth and capital appreciation by investment in the primary healthcare real estate sector in the UK and Ireland, which is traditionally less cyclical than other real estate sectors,” it added.
The SA Reserve Bank’s financial surveillance department has given the green light for the shares to be classified as domestic, meaning that trading in PHP shares won’t affect local investors’ offshore allowances.
CEO Harry Hyman told Financial Mail last week that the time was right for a secondary as it is the “first time since the global financial crisis in 2008 that we are trading at a discount to net asset value (NAV)”.
He added that at the “current pricing, PHP offers SA investors a relatively cheap entry point and a high dividend yield”.
Its shares are down almost 40% over the past 18 months because of interest rate hikes and fears of a recession, among other factors.
According to its latest financial results, the REIT grew its net rental income 6.2% to £75.5m in the six months to end-June.
Food producer and consumer products group Premier returned to the JSE after 18 years in March, making it the first listing on the local bourse this year.
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