Hili Properties aims to raise €49 million for new properties through IPO

The Malta Financial Services Authority on Tuesday approved a prospectus submitted by Hili Properties in relation to a proposed public offering and listing of the company’s shares.

Hili Properties currently has a property portfolio valued at more than €115 million. Its 5,280m2 offices in Luqa alone are valued at €16.9 million
Hili Properties currently has a property portfolio valued at more than €115 million. Its 5,280m2 offices in Luqa alone are valued at €16.9 million
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The Malta Financial Services Authority (MFSA) on Tuesday approved a prospectus submitted by Hili Properties in relation to a proposed public offering and listing (IPO) of the company’s shares. Hili Properties had filed its application on 21 October.

The company aims to raise around €49 million from the IPO, which will be used to finance new property acquisitions. It is anticipated that €30 million will be utilised in terms of an acquisition of immovable property in 2022, whilst €19 million will be utilised to partially finance a property acquisition in 2023.

Hili Properties is in advanced discussions to acquire one commercial property in Poland and industrial property in Lithuania, having a combined value in excess of €38 million.

The company is also currently negotiating the price for the acquisition of additional commercial assets.

The acquisitions will be fully funded through a mix of readily-available own funds and financing from the bank and parent companies.

Hili Properties already owns and manages strategic commercial real estate for lease in Malta and several other European countries, including Estonia, Latvia, Lithuania, and Romania.

Its portfolio comprises dedicated business blocks and office space, grocery-anchored shopping centres, healthcare facilities, and property housing McDonald’s restaurants in key commercial districts. The current portfolio value exceeds €115 million.

Hili Ventures currently holds 299,999,990 shares of a nominal value of €0.20 each in Hili Properties. representing 99.99% of the issued share capital.

On the basis that the issue is fully taken up, following completion of the Issue, Hili Ventures will hold 62% of the issued share capital.

The net asset value per ordinary share of Hili Properties as of 30 June 2021 -  the date of the latest balance sheet before the IPO - is €1.52.

The adjusted net asset value per ordinary share - which also factors in the issue and allotment of 18,408,000 ordinary shares of one €1 and the redenomination of the issued share capital from 60 million ordinary shares of a nominal value of €1 each to 300 million ordinary shares of a nominal value of €0.20 - is of €0.29.

New property acquisitions

The commercial property Hili Properties is seeking to acquire in Warsaw is located in a strategic location, on one of the city’s main exit arteries having close vicinity to residential areas and great access both by car and public transportation.

Hili Properties says this newly-constructed property boasts of an approximate 7% yield, a long lease duration of nine years and additional extension options.

The industrial property earmarked for acquisition in Lithuania has excellent access to key cargo routes and is under a 20-year lease agreement with a single tenant occupying 100% of the facilities.

Trading

The group expects to generate a strong solid cash flow over the forthcoming years. Hili Properties believes that having long-term lease contracts in place will allow it to adopt a generous dividend distribution policy.

Based on the offering price of €0.27, Hili Properties is set to distribute a 4% net dividend.

The Issue Period will open on 4 November and run until 26 November.

The company expects to file an admission of the shares on the Malta Stock Exchange on 15 December 2021.

Trading of the New Ordinary Shares is expected to commence on 16 December 2021.

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