Our opinion on the current state of APO

This is a newly formed real estate investment trust (REIT) which says that its strategy is to, "...invest in yield-enhancing assets and areas that offer consistent, long-term rental growth...". The company said, "The investment properties comprise of three properties held by way of leasehold for 40 years, which has been independently valued ahead of the intended listing as a Real Estate Investment Trust (“REIT”) on the Main Board of the JSE. The purchase consideration was settled through the issue of new shares by aReit Prop. The leasehold properties were acquired with effect from 31 December 2021 from the Vendors, who were the 100% shareholders of aReit Prop at 31 December 2021 and immediately prior to listing". In its results for the year to 31st December 2022 the company reported revenue of R65,4m and headline earnings per share (HEPS) of 63,97c. The company's net asset value (NAV) was 923,95c per share. The company said, "aReit Prop holds a portfolio of three properties, two in the hospitality sector and one in the medical sector, with a total GLA of 22 261m2. The properties are situated in prime locations in Cape Town and have strong long-term tenants". In a trading statement for the six months to 30th June 2023 the company estimated that HEPS would not change from the previous period while basic earnings per share (EPS) would fall by 37,8%. The company said, "The reason for the variance in the basic earnings per share is attributable to the fact that the prior year did not have a fair value adjustment". Obviously, it is necessary to wait until this share begins trading reasonable volumes on the JSE before any realistic assessment can be made, but at the moment volumes are virtually non-existent making this impractical for private investors.