AECI's substantial property assets are held in the company's wholly-owned subsidiary Heartland‚ which has predominantly industrial‚ office and land holdings across Gauteng‚ KwaZulu-Natal and the Western Cape.
The company‚ which said it could not yet provide further details‚ said the property assets "are surplus to the AECI group's operational requirements".
Avior Research analyst David Lerche said the deal would "bring forward the expected cash-flows from the sale of the land".
Lerche said the land holdings were the legacy from earlier times when much more space around explosives factories was required.
"The plan has always been to sell the land over a number of years but it seems they have found a buyer at an appropriate price‚ to take a larger chunk.
"So instead of having to wait a number of years to see the cash‚ investors are likely to see it earlier‚" Lerche said.
An analyst who could not be named in line with company policy said the land was attractive for mixed-use‚ long-term developments.
AECI had "put in a lot of work in terms of ensuring that the infrastructure is there and services are available for development"‚ the analyst said.
The company had also rehabilitated some of the land which was the site of the old explosives plant.
As AECI only required a much smaller piece of land for its operations‚ the surplus land could "generate healthy returns" for the company.
The analyst said developments would take years to complete at the site and would require "a sizeable capital investment given that on day one there will not be a big income stream from it".
However in the medium- and long-term‚ the property was attractive and was well located given the likely development of a new Gautrain station.
Source: Business Day via I-Net Bridge
For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.
We pride ourselves on our wide variety of in-house skills, encompassing multiple platforms and applications. These skills enable us to not only function as a first class facility, but also design, implement and support all our client needs at a level that confirms I-Net Bridge a leader in its field.
Go to: http://www.inet.co.za
