Property fund set to be dumped from the JSE

aREIT Prop has been put “on notice” by the JSE, and if it remains suspended for the next 20 business days, it faces being removed from the stock exchange.

In a SENS announcement released on Tuesday, 2 July 2024, the JSE announced that aREIT – a property group holding leasehold properties with a focus on the hospitality and medical sectors – had been placed “on notice”.

This comes after the JSE announced via SENS on 2 May 2024 that aREIT failed to submit its annual report within the four-month period stipulated in the JSE’s Listings Requirements.

“Accordingly, the company’s listing on the JSE trading system has been annotated with a ‘RE’ to indicate that it has failed to submit its annual report timeously,” the stock exchange said.

The JSE added that the listing of the company’s securities is under threat of suspension and possible removal.

“If the company still fails to submit its annual report on or before 31 May 2024, then its listing may be suspended.”

On 3 June 2024, the JSE announced that aREIT failed to publish its condensed financial statements or annual/ summary financial statements for the year ending 31 December 2023 within the prescribed period stipulated in the JSE Listings Requirements.

“Accordingly, the listing of the company’s securities has been suspended with immediate effect,” the stock exchange said.

On 2 July 2024, the JSE announced that aREIT had been placed “on notice” in association with section 6.5 (Suspension of Dealing) of the FTSE/JSE Ground Rules.

“Consequently, if this constituent remains suspended after a further 20 business days after today, it will be removed from the FTSE/JSE indexes with two days’ notice at a nominal value (0.0001),” the stock exchange said.

The JSE’s Director of Issuer Regulation, Andre Visser, told Daily Investor that aREIT had not published its financial statements within the prescribed period stipulated in the JSE Listings Requirements.

“Consequently, its securities were suspended with immediate effect,” he said.

“Once the issuer rectifies this breach by publishing the financial information, the JSE will follow the required process to consider lifting the suspension.”

Shares in aReit started trading today on the JSE’s Main Board in March 2022.

aReit was the 39th company to list on the bourse’s Real Estate Investment Trusts (REITs) sector, which had a market capitalisation of about R327 billion at the time of the company’s listing. 

When it listed, aReit said potential investors would benefit from strategic investments it intends to make over the next three years in the health and leisure sectors as it capitalises on the recovery of this segment in the aftermath of the Covid-19 pandemic. 

“We are excited to be listing the first leasehold property REIT on the Main Board of the JSE with our quality tenants, long-term leases and secure, predictable returns for investors,” the company said. 

“This is the first step in our journey to roll out this new yet simple concept for South Africa in order to expand our portfolio both locally and internationally.”

aReit revealed that it had secured long-term leases with strong tenants, mostly with rentals being the higher of the minimum rental or 25% of turnover.

It said this would support its bid to take advantage of the recovery in the health and hospitality industries. It also plans to look for other long-term lease opportunities and assets, both locally and internationally.

Valdene Reddy, JSE’s Director of Capital Markets, welcomed aReit’s listing, the second for 2022, adding that it comes at a time when South Africa’s economy and the property sector, in particular, are gradually recovering from the impact of Covid-19.  

“We are pleased to welcome aReit to the JSE and are excited by the growth opportunities their listing brings for the company,” Reddy said.

“The hospitality and health sectors are focus areas globally, and we look forward to the potential aReit enables for South Africa.”

Daily Investor reached out to aREIT for comment but did not receive a response by the time of publication.