16
CONSTRUCTION WORLD
MARCH
2014
Established in 1993, Visual International is a South African
property development company that develops mixed-use
residential suburbs for the middle-income market. With its
decade-long track record, it had grown its assets to around
R126,5-million. Its net asset value is around R60-million, and spans
some 80 000 m
2
of developable bulk that is ultimately expected to
produce real estate investment of around R2-billion.
The AltX, or alternative exchange, is a division of the JSE and a
parallel market focused on good quality small-and medium-sized
high-growth companies. It provides these companies with a clear
growth path and access to capital, while giving investors fresh, exciting
opportunities and the prospect of investing in a growing business.
Reason for listing
And this is precisely the reason Visual International headed for an AltX
listing. Visual International intends to raise R33-million prior to listing
on the AltX, through the issue of 66 000 000 new shares at R0,50 per
share. This will unlock the next chapter of its growth path, with the
capital raised applied to fast-tracking its residential development
plans at its flagship Stellendale Village over the next two years.
The award-winning Stellendale Village development is a
22 hectare mixed-use residential suburb just off the Stellenbosch
Arterial in Kuils River, Cape Town, which will ultimately provide some
1 500 homes to middle-income households when completed. Visual
International has already developed 440 homes at Stellendale Village,
with a further 63 under construction, and plans to unlock further
phases of development at Stellendale Village, including its integrated
retirement estate. It will also acquire about 15% of the apartments in
the precinct and make them available to rent.
The upshot of all this is a two-year long term earnings per share
growth forecast of 33,5% for Visual International. Being a long term
play focused on capital growth, Visual International plans to reinvest
all profits for its first five years after listing without paying dividends.
It will introduce dividends thereafter. “We have set our sights on a JSE
main board listing at the right time,” says Charles Robertson, Visual
International founder and managing director.
And Visual International’s potential for growth, by unlocking
middle market residential opportunities, is extraordinary.
“Demand for quality housing from the growing middle-income
market in South Africa is strong. Our model of developing mixed-use
suburbs on suitable land near jobs and infrastructure, meets this
demand. Right now, we are selling units at Stellendale Village faster
than we are able to develop them,” explains Robertson. “Listing Visual
International 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.”
“Historically, South Africa consisted of ‘haves’ and ‘have-nots’ but
in recent years a new, growing middle market has emerged and will
continue to develop even further,” says Robertson.
Meeting a need
“This market is driving performance in many sectors of the economy
and the success of businesses like Shoprite and Pep. It is also
supporting higher car sales figures and growing numbers of restau-
rant and fast food outlets. However, middle-income people are poorly
served with suitable residential opportunities and are in need of
quality apartments and homes to live in.”
This is the important need that Stellendale Village is meeting
and why Visual International sees excellent prospects for its business
model, not only in the Western Cape, but also in Gauteng. According to
South Africa’s latest population statistics, both provinces are showing
higher population growth than the national average and other South
African provinces. The new shares to be issued in Visual Internation-
al’s capital raising equate to 26% of the shares in the company, with
74% held by its executive team and a Kuils River empowerment initia-
tive they have established. This aligns management interests strongly
with those of investors.
Visual International is led by a skilled and experienced executive
team with more than 70 years of combined experience in all aspects
of the property development sector. Robertson is a property devel-
oper with 30 years experience, including projects like N1 City. Projects
Director Peter Grobbelaar has extensive experience in both the
construction and property development industries, including the V&A
Waterfront Marina Residential Development and High Cape. Financial
Director Grant Noble has extensive experience in financial manage-
ment and administration of private security estates.
Their outlook for residential property for the middle market is
undoubtedly positive. “We are seeing renewed interest in residen-
tial property in South Africa and potential for good strong capital
growth. Many residential developers fell victim to the effects of the
global economic crisis and there have been few new builds in recent
years and many abandoned projects. As recovery steadily enters the
marketplace, we see many opportunities for more developments like
Stellendale Village and joint ventures.”
Visual International has secured a pipeline of future develop-
ments and is establishing strategic partnerships in Gauteng.
PROPERTY
Residential property
DEVELOPMENT LISTING
Visual International Holdings will
provide a unique opportunity for
investors to share the benefits of an
investment in developing mixed-use
residential suburbs for the middle-
income market – conceivably the
fastest growing residential property
market segment in South Africa –
when it lists on the JSE AltX.
Charles Robertson, Visual International
founder and managing director.
The award-winning Stellendale Village
development is a 22 hectare mixed-
use residential suburb just off the
Stellenbosch Arterial in Kuils River.
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