Investec Property Fund delivers interim results in line with expectations
The Investec Property Fund announces solid maiden results for the six months to end September 2011.
The Investec Property Fund announces solid maiden results for the six months to end September 2011.
The Investec Property Fund announces solid maiden results for the six months to end September 2011, supported by focused growth through the acquisition of quality income generating properties and effective management of lease renewal and tenant retention in a difficult economic climate.
Salient features:
• Distributable income of R74.3 million
• Distribution of 43.73 cents per unit
• Marginal improvement in vacancies from 3.7% at listing on 14 April 2011 to 3.4% at 30 September 2011
• Property portfolio value R1.7 billion
• Pending acquisitions valued collectively at R330.9 million
• 31% of the portfolio’s lettable area comprises high quality single-tenanted properties with medium to long term leases, equal to 44% of the Fund’s gross rental income
• Total gross lettable area (“GLA”) of 370 543 m² across the portfolio.
Commenting on the results, Investec Property Fund CEO Sam Leon says: “The performance of the Fund in the first six months is in line with expectations. The high proportion of quality single tenanted properties with medium to long term leases is a key strength of the Fund, and in the current economic environment, tenant retention remains a priority for the team.
“We recently announced three acquisitions and these are expected to enhance income in the second half of the year. The largest is a quality retail centre, underpinning our intentions to increase the retail assets of the Fund.”
The acquisitions include the Innovation Group and Scientific Group properties acquired collectively for R185 million and The Great North Road Plaza in Mussina acquired for R145 million, all of which will be financed through borrowings, taking advantage of the borrowing capacity of the Fund which was ungeared at listing.
The Fund expects to deliver the forecast full year dividend of roughly 90 cents per unit, barring a major deterioration in market conditions.
About the Investec Property Fund
* The Fund is a limited liability, variable loan stock company formed with the purpose of investing in direct real estate, with the potential for income generation and capital growth.
* It includes a spread of property assets in the office, retail and industrial sectors underpinned by strong rental income.
* Following the recent acquisition of three properties, the property portfolio will comprise 32 properties independently valued at R2.1 billion, primarily in Gauteng but with good representation in the Western Cape and KwaZulu-Natal.
* The Fund is committed to acquiring income producing properties that will enhance the overall capital and income returns to linked unit-holders in the medium to long term.
* The capital structure of the Fund comprises a linked unit, being one share linked to one variable rate, unsecured, subordinated debenture.
* The net income in the Fund is distributed to linked unit-holders after providing for related expenditure.
About Investec Property
Investec Property Limited, which is the manager of the Investec Property Fund, is a subsidiary of Investec Limited and is one of South Africa’s best recognised property developers and managers. Investec Property has built strong operations within the specialist areas of:
• Trading and acquisitions – sourcing buildings or land opportunities with the intention of unlocking value and ultimately trading the assets in order to maximise return
• Developments – developing, re-developing and refurbishing within the office, retail, industrial and land conversion sectors.
• Management of property funds
Investec Property has access to capital and can enter into joint ventures to source and buy land or buildings for development, redevelopment or refurbishment. The team has significant experience and a proven track record in this space which, have allowed them to deliver optimal returns for shareholders and clients.
