Vividend Income Fund reports full-year distribution growth
Vividend Income Fund CEO Ari Jacobson says we are medium-term builders and a sustainable path is in place with a forecast 50c for the year to August 2014.
Property loan stock company Vividend Income Fund (VIF) has declared a distribution of 50c per linked unit for the year ended August 31 2013 which was above forecast expectations.
This was 1% ahead of its internal forecasts that accounted for funds raised via an earlier rights issue to pay for the Access Park acquisition.
The fund‚ which recently successfully converted to a real estate investment trust (REIT)‚ had forecast a total distribution of 49.5c per linked unit.
Headline earnings per linked unit for the year were 54.22c versus 48.67c the previous year.
Vividend CEO Ari Jacobson said the performance was all the more impressive, as the R401m raised by Vividend had earned 5% for five months because the Access Park property was only transferred at the end of August. Access Park is in Kenilworth, Cape Town.
Revenue grew from R134.6m to R198.7m‚ with R401m in capital being raised via a combined claw-back and rights offer. The fund’s property portfolio has swelled to 21 properties valued at R2 billion.
The portfolio in the year under review grew via the Access Park purchase, for R494m, and the addition of two Sasol properties in Randburg, worth R155m together. This excluded a yield-enhancing R145m industrial property transaction which would come on stream early in 2014, Mr Jacobson said.
Vividend struggled with growing vacancies. The year under review saw vacant space escalate to around 8.7% of the portfolio from 2.4% last year.
The drop from 28% to 21% in the ratio of property expenses to revenue was due to cost-saving initiatives and a "deceleration of repairs and maintenance expenditure," Mr Jacobson said.
"Proactive maintenance and refurbishment is part of our way to improve a portfolio and money has been spent and will be spent on upgrading and adding value of R46m is already earmarked for the 2014 year," he said.
Access Park was the most recent and largest of Vividend’s properties. It had tenanted close to 2,700m² in the past few months with brands such as Cotton On, Factorie, New Balance, Playtex and Stuttafords taking big box space.
A total of R649m was invested in new properties during the year.
Vividend Income Fund listed on the JSE's main board in 2010. The portfolio has, however, grown fourfold over the past year from R531m to just over R2bn as at the end of August 2013.
This has been driven mainly by acquisitions and it is in line with the prelisting target to grow assets to R1,5bn by August 2012.
