Shopping Malls sustain Resilient Property Income Fund growth

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Resilient Property Income Fund CEO Des de Beer says we have done well through diversification of our property assets. Resilient Property Income Fund CEO Des de Beer says we have done well through diversification of our property assets.

Last week, Resilient Property Income Fund (RES) declared an 18.3% increase in distributions per linked unit for the six months to December last year compared with the six months to December the year before.

The company declared a distribution of 159,59 cents per linked unit for the interim period ended December 2013 — an increase of 18,3% over the previous comparable six month period.

Turnover rental of R21.2 million was received against a budget of R12.8 million.

Management said this supported its view that rentals in the property portfolio‚ on average‚ are below market.

Historically, over 90% of turnover rentals are received during the July to December period.

Resilient’s comparable retail sales for the period July to December grew by 8,1% which compares favourably with national retail sales growth.

In terms of sales growth per province, the North West shrank 0.1% but every other province grew: Eastern Cape by 2.8%; KwaZulu-Natal 4.1%; Limpopo 8.4%; Gauteng 8.9%; Mpumalanga 12.6%; and the Northern Cape by 18.9%.

"The performance of North West province reflects the current challenges of gold and platinum mining.

"The Eastern Cape continues to be negatively affected by the major redevelopment and extension of Circus Triangle Mthatha," Resilient said in a statement.

"KwaZulu-Natal was positively impacted by a strong performance at The Galleria but negatively impacted by Murchison Mall which is also undergoing extensive redevelopment and refurbishment," the group said.

Sales at The Galleria increased 10,4% but the effect on Resilient’s figures was minimal as only a 10% holding was taken into account for comparative purposes.

The Northern Cape continued to benefit from past extensions and improvement to the tenant profile at Village Mall Kathu.

Resilient Property Income Fund CEO Des de Beer says we have done well through diversification of our property assets. "We believe we can achieve similar distribution growth in 2014," said Mr De Beer.

According to the company‚ distributions are forecast to increase by between 17% and 19% for the 2014 financial year.

The board agreed to increase its capital commitment to the Resilient Africa joint venture for the development of properties in Nigeria to R1 billion.

Resilient has a 50.98% interest in Resilient Africa with Standard Bank and Shoprite Checkers as its joint venture partners.

The group’s strategy is to invest in dominant regional retail centres with a minimum of three anchor tenants and let predominantly to national retailers. Resilient, which was one of South Africa’s best-performing listed property stocks last year, also invests in offshore property related assets.

Old Mutual Investment group South Africa portfolio manager Evan Robins said the results were strong as expected. 

"Resilient is a market leader and these results are in line with their forecasts," said Mr Robins. "Their strategy of diversifying and then being market dominant in certain sub-sectors of listed property works well," he said.


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