Andrei Imbroll, founding shareholder and director of VBL plc, discusses the future of the Group and the upcoming listing on the Malta Stock Exchange.
The VBL Group is well known for its strong connection to the capital. Why Valletta?
Valletta is the administrative, cultural and touristic heart of the island. VBL is a real estate investor with a diversified portfolio, covering residential, hospitality, retail and office space, with a clear focus on Valletta. This focus allows us to have a clear vision of where we want to go but more importantly, it helps us shape where we want Valletta to go.
The offering period for the IPO closes on September 24. You are raising equity through this IPO which is not very common in Malta. What’s the reason for the IPO and why equity?
Currently, 20 per cent of VBL’s portfolio is developed and giving the Group excellent returns. We are raising equity in order to speed up the development of the 80 per cent of the portfolio which is still undeveloped. This development cycle will significantly increase our revenues and allow us to achieve economies of scale and hence improve our bottom line.
Listing the company on the Malta Stock Exchange was a milestone set by the shareholders early on. VBL boasts a substantial number of shareholders, most of which are seasoned businesspeople, specialised in various segments. They chose to invest their savings in a historical real estate equity play because they felt it was a safe real estate investment with limited supply, while Valletta offered huge upside potential.
While equity listings are not very common locally, I’m sure that others will follow our lead and will seek equity listings on the MSE. VBL started investing heavily in Valletta in 2012, when few private enterprises were investing in our capital. As we impacted the Valletta real estate market, we aim to have an impact on the MSE.
Local equity investors traditionally prefer dividends to growth. Your publicly available prospectus forecasts an impressive growth story. Do you believe this will be a challenge?
For the last five years, VBL has been paying out a growing dividend to its shareholders. It has also paid out a dividend during the COVID-19 disruption, contrary to many established businesses locally. This is the culture of the company and by accelerating development we will be in a position to increase our dividends substantially while shareholders keep enjoying the growth.
You are raising €20 million of equity – part of this will be used for shareholders to exit. If you believe so much in VBL’s future, why are shareholders selling?
Creating a track record of regular liquidity events for shareholders is a must. An IPO is one of those occasions. Shareholders need to feel safe that they are investing today, and they will have the opportunity of exiting in the future. Having said that, the first €10 million raised are going towards purchase of newly issued shares and only anything in excess will be used for purchase of existing shares. No shareholder is exiting completely, but some liquidity is being generated for all shareholders while the largest shareholders are undertaking a two-year lock-in period.
What do you mean when you say that VBL is ‘Your Gateway to Valletta’?
Anyone seeking accommodation in Valletta, entertainment, a residence, office space and more, could simply reach out to VBL and we would introduce our clients to all Valletta has to offer. With the IPO, ‘Your Gateway to Valletta’ takes on a new dimension. Investors can now own a part of Valletta by owning shares in VBL. Shareholders will get significant benefits from VBL’s shareholder programme, which will seek to give incentives to shareholders to interact with our products.
Where do you see VBL and Valletta going?
At VBL, we will not be re-inventing the wheel. In the next cycle, we will keep doing exactly what we have done over the last decade. Developing Valletta real estate in our portfolio and consolidating the Valletta Hospitality market. As we grow our developed portfolio, we will diversify further our revenue streams and seek to add value to the Valletta product.
As for Valletta, VBL has already worked on the regeneration of Valletta’s historical nightlife district at The Gut in Strait Street. In the next phase, we are working on a new fashion district in the city and revitalisation of the retail segment as well as investing in a number of large-scale greening projects, including the Salinos and the 1000sqm rooftop of the VBL Building.
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