Oryx Properties, the largest property fund in the country, has partnered with RMB for the acquisition of Dunes Mall in Walvis Bay, in a landmark transaction worth N$630 million. This strategic deal sees Oryx expand its retail asset portfolio, with RMB providing debt funding of N$500 million to realise the acquisition and refinance an existing N$100 million loan.
The acquisition underpins Oryx’s revised strategic plan to expand its property portfolio from N$3 billion to N$4.5 billion by 2025. In addition, it will considerably diversify Oryx’s portfolio in relation to existing concentration.
“RMB was able to secure the deal thanks to innovative structuring, which significantly reduced the cost of the debt and allowed for higher gearing, testament to their commitment to helping clients achieve their growth strategies. RMB’s proposed deal structure resulted in pricing well below Oryx’s benchmark cost of debt and thus unlocked incremental shareholder value from the transaction. The well-structured facility and RMB’s strong brand name underpinning the deal enhanced investor confidence in Namibia and abroad, resulting in a highly successful equity raise of Oryx on the Namibian Stock Exchange,” reads a statement from Oryx Properties.
The statement added that the transaction is testament to RMB and Oryx’s deep commitment to investing in the Namibian economy to assist in realising its full potential.
According to the statement, the two partners share a common conviction of a prosperous outlook for Namibia, driven by the potential to become the future energy hub of the African continent. The Dunes transaction allows ordinary Namibians to participate in the expected economic renaissance through ownership of NSX-listed shares of Oryx and RMB (through FirstRand Namibia Limited).
“Our ability to tailor bespoke solutions for large, complicated transactions was instrumental in the closing of this deal. RMB congratulates Oryx on the successful transaction. We look forward to deepening our funding partnership and collaborating on future opportunities,” said Steffen Müseler, Senior Deal Maker at RMB Namibia.
Earlier this year, Oryx Properties announced notable improvements in its operational metrics for the year ended 30 June 2023. This included rental reversions increasing to 3.7% (2022: -7.3%) and debtors collections improving to 101% (2022: 96%).
Total capital expenditure amounted to N$72 million (2022: N$32 million). Capital expenditure incurred during the year included a N$4 million solar project to Maerua Mall, Gustav Voigts Centre, Erf 135 Scania and Urban Village at Elisenheim. Also, N$22 million was incurred to upgrade the Gustav Voigts Checkers offering.
In addition, N$30 million was incurred on Erf 3519 Iscor Street with the construction of a new industrial warehouse. The group also entered into a lease agreement acquiring the Maerua Crossings right-of-use investment property to the tune of N$6 million.
Oryx Properties CEO Ben Jooste expressed his satisfaction with the annual results. “We are on the right track towards achieving our growth strategy and are geared to deal with our challenges while finding more opportunities to add value to our stakeholders.” He noted that one of the current challenges was the retention of tenants where a decrease to 84% (2022: 97%) was perceived. Further, finance costs increased by 20% during the year mainly due to interest rate hikes.
The group advised that the portfolio was independently valued at N$3.1 billion (2022: N$2.8 billion) by Mills Fitchet Magnus Penny with a positive fair value adjustment of N$100 million (2022: N$47 million).
Francis Heunis, CFO of Oryx Properties explained that the positive fair value adjustment was mainly attributed to the retail segments, with Maerua Mall and Baines Centre increasing by N$40 million and N$21 million respectively.
“We are proud to say that the increases are underpinned by solid tenancies in place where positive rental growth and reversions, and specifically those of the anchor tenancies, were realised during the year. We thank our loyal tenants for their consistent support and look forward to many more mutually beneficial years.”