Oryx Properties has reached a debt financing agreement with RMB, which will see the bank lending the listed company N$500 million over a four-year term.
The property firm intends to use the new RMB facility to top up on the N$379.6 million set to be raised from the rights issue which is set to close on Friday towards the N$632.7 million Dunes Mall purchase price.
The company is currently in the final stages of raising funds to acquire Dunes Mall at Walvis Bay.
The RMB loan will also repay an existing N$100-million loan facility that Oryx has with the investment bank and a N$75-million Nedbank loan, which both mature in August 2023.
According to IJG: “These are currently Oryx’s two most expensive loans (at 3m Jibar + 2.98% and + 2.85%, respectively), and repaying them with the new RMB loan will translate to a N$2.7 million saving in interest expenses. The realised savings will be paid back into the ABSA revolving credit facility, which will lead to further interest expense savings.”
Oryx has agreed to purchase the Dunes Mall at a price of N$620 million and agreed to pay N$8.25 million for the additional land, bringing the initial purchase price to N$628.5 million, and the maximum adjusted purchase price to N$651.1 million inclusive of the purchase price adjustment PPA and land, but exclusive of transaction costs.
“The Dunes Mall was built in two phases in 2017 and 2019 respectively at a total cost of circa N$600 millionThe Dunes Mall has shown strong rental growth over its lifetime, and there is still significant room for growth given the projected growth of its catchment area and the greater Walvis Bay,” the listed company said in its circular to shareholders.
Oryx said the Dunes Mall includes bulk land earmarked for future development, which Oryx believes holds significant potential to further enhance the already favourable yield of the asset.
“Several interested parties have been identified for these additional developments, and these opportunities will be pursued once the transfer of the Dunes Mall has occurred. These include additional retail offerings, entertainment and food and beverage offerings as well as tourism-related offerings.”
Justifying the acquisitions, the property company said the Dunes Mall buy will, among other objectives, allow for geographic diversification and diversification away from its largest asset, Maerua Mall.
“On the latter point, the exposure of Maerua Mall in the portfolio is expected to decrease post the Dunes acquisition. The acquisition of Dunes Mall fits well within Oryx’s strategy, with a focus on geographically diversifying the portfolio and de-risking Oryx’s over-dependence on Maerua Mall,” the company said.
Oryx is a well-established property investment fund with a N$3 billion property portfolio and exposure to different real estate industry segments and as part of its Strategy 2025, the company aims to grow the property portfolio to N$4.5 billion geographically within Namibia by 2025.
