Sycom Property Fund gains 4.4% distribution growth

Sycom Property Fund CEO Paul Theodosiou said said the group had achieved credible results, given the difficult economic conditions.

JSE-listed property group Sycom Property Fund (SYC) on Thursday reported a distribution of 88.12c per unit for the six months ended September 2013, an increase of 4.4% from a year earlier.

The company said the review period was one of significant acquisition‚ disposal and redevelopment activity‚ in line with the board’s policy of continuously improving the portfolio and enhancing its income growth potential.

Paul Theodosiou, Chief Executive Officer of Sycom Property Fund Limited said the group had achieved credible results, given the difficult economic conditions.

An undivided half-share was acquired in the Greenacres Shopping Centre in Port Elizabeth and a significant expansion and redevelopment of Vaal Mall was approved‚ to start early next year.

These two activities will add close to R1bn to the value of the fund’s retail portfolio.

Sycom also sold its stakes in Southgate Mall and Value Mart shortly after the period end‚ as well as the Discovery building in Sandton.

With distribution growth of more than 7% expected in the second half of the financial year‚ it said the interim results were in line with guidance provided for the full year to end-March 2014.

Commenting on the results, Property fund manager at Alternative Real Estate Capital Management, Maurice Shapiro, said Sycom is well positioned to grow their portfolio with yield accretive acquisitions, such as their recent acquisition of a 50% undivided share in Greenacres Shopping Centre together with Acucap.

This puts the company in a unique position to exceed growth expectations, while acquiring new quality assets into the property sector," Mr Shapiro said.

Sycom is a closed-end property unit trust (Put) established in 1986. Its portfolio consists of stakes in 15 properties, with relatively equal weighting to the retail and office sectors.

The retail exposure comprises regional shopping centres such as Somerset Mall (Somerset West), Fourways Crossing (Jo'burg), N1 City Mall (Cape Town) and Vaal Mall (Vanderbijlpark). The office component consists of eight large, A-grade office buildings and office parks, with mainly large corporate tenants located in Jo'burg's northern suburbs.