Acucap sees rise in total distributions

Acucap Properties has posted a 6.3% rise in total distributions to 275.63c per unit for the year ending in March from the previous year.

Acucap Properties on Thursday posted a 6.3% rise in total distributions to 275.63 cents per unit for the year ending in March from the previous year.

Revenue was up R624.2 million from R552.1 million. Profit for the year was up R427.5 million from R124.9 million last year.

The fund said there were mixed signals around the performance of the South African economy, with weak credit extension and money supply growth numbers suggesting demand-side weakness, and pointing to lower output growth and slower job creation.

The company said external factors and administered cost increases were causing inflationary pressures to build on the supply side.

Acucap said: "In spite of historically low interest rates, businesses and consumers remained cautious, and this is likely to persist until the economic outlook becomes clearer." 

Reported tenant revenue in Acucap's retail portfolio grew by 7.6% in nominal terms during the year under review, compared with the previous period, but by a lower 4.9% for the quarter ending in March, compared with the same quarter last year.

"While this suggests that consumer spending may be losing momentum, the month of April produced a return to double-digit turnover growth, 11.5% higher than the same month last year," Acucap said.

Vacancy rates remained low across Acucap's retail portfolio, ending the year at 2.9%, while net income growth from the fund's retail assets was 13%. Vacancies remained low in Acucap's high-quality office portfolio, ending the year at 3.5%.

Distributions received from Acucap's investment in Sycom Property Fund were slightly lower at 156.67 cents per unit, compared with 159.34 cents per unit in the previous year.

This result was largely due to cyclical weakness in the office market, where Sycom's vacancies increased from an average of 8.2% for 2010 to an average of 10.9% for this year.

Looking ahead, Acucap said its portfolio was well-positioned to continue delivering real growth in distributions, even though economic growth rates in SA remained below potential.

"Household demand is expected to continue its gradual improvement, particularly if interest rates remain low in the coming financial year, and this should support retailers," it said. Signs of an improvement in the market for A-grade offices were also expected to assist Acucap in its renewals for 2012.