Delta's results ahead of expectations
Delta Property Fund CEO, Sandile Nomvete attributes this outperformance its substantial growth in assets, its increased management capacity for its growing portfolio and excellent debt management, among other factors.
Black empowerment property group, Delta Property Fund has delivered on its growth promises, both in terms of income payouts and bulking up its portfolio with yield-enhancing acquisitions.
The property counter, which listed on the JSE in November 2012, on Thursday last week posted distribution of 40.18 cents per linked unit for the six-month period ending February 2014.
The result brings its final distribution to a guidance-beating 72.69 cents per linked unit for its first full financial year as a JSE-listed property fund.
Sandile Nomvete, CEO of Delta, attributes this outperformance its substantial growth in assets, its increased management capacity for its growing portfolio and excellent debt management, among other factors.
Nomvete comments, “Delta started this financial year with property assets valued just over R2 billion. Thanks to our aggressive growth strategy, we have increased this to R7 billion during the year with strategic, yield-enhancing properties. As a result, our distributions for the second half increased 23.6% from the first half of the year.”
Delta’s Net Asset value increased 12.42% from R7.89 at the start of its financial year, to R8.87 at its close.
Despite a tough operating environment, the company reported a portfolio occupancy of 95.4% and renewed leases over 156,263sqm of space, which represents around 25% of its portfolio.
During the period Delta acquired 9.07% of Ascension A and 21.94% of Ascension B units in issue. Its Ascension investment contributed positively to Delta’s results. While its offer for Ascension’s management company has resulted in merger prospects with Ascension and Rebosis, and the prospect of together becoming the seventh largest property fund. Talks around the merger are continuing.
Nomvete adds, “This is not a forced merger, it would be a merger very carefully taking into account the best interests of our shareholders.
Besides giving priority to maintaining sound property fundamentals, Delta has several strategic objectives for its continued growth. This includes an established yield-enhancing pipeline of acquisitions of around R800 million and capital projects to improve and expand its assets.
The Delta Board has also approved the acquisition of a 20% shareholding in a fund that will be invested in other African countries. This is the second phase of a four-part strategy in the development of Delta.
“Delta has a long-term strategy and will continue to innovate to pursue yield-enhancing portfolio growth opportunities. We will also continue to grow our management resources with exceptional skills. This will support sustainable value creation for our investors and all stakeholders,” says Nomvete.
The Fund’s property portfolio comprises 77 properties that are geographically diversified across nine South African provinces. Its average value per property is R90.5 million. Some 56% of its portfolio benefits from a secure long-term sovereign underpin of commercial government leases, including major offices for SARS.
