Accelerate Property Fund bumps up distribution on growth

The Directors at Accelerate Property Fund, CEO Michael Georgiou (Left) seen with Tito Mboweni and Andrew Costa (COO) during the JSE listing event in 2013.

JSE-listed Real Estate Investment trust (Reit), Accelerate Property Fund with significant exposure in the Fourways node, has boosted its distribution for the six months to September 2014.

Accelerate‚ which listed onto the JSE in December 2013‚ reported diluted headline earnings per share (HEPS) of 24.91c for the interim period.

It declared an interim cash distribution of 23.99c per share, exceeding the pre-listing forecasted distribution of 23.93 cents per share. Distributable profit after taxation attributable to equity holders of R141.6 million was reported.

Accelerate earned a gross rental income of R335.8 million for the period, comprising net rentals of R246 million and R75.3 million of operating expense recoveries.

“We are pleased to have delivered on our pre-listing forecast despite challenging market conditions. During the reporting period we focused on prudent debt management and successfully launched a Domestic Medium Term Note Programme which was significantly oversubscribed.

“We optimised the portfolio, significantly reduced the office vacancy rate in the portfolio from 18.1% to 10.3% and kept a tight handle on costs,” commented Andrew Costa, COO of Accelerate.
 
As at September 2014, Accelerate’s portfolio consisted of 51 properties, independently valued at R6.126 billion.

During the period, the Company invested R23 million in the refurbishment of the Thomas Pattullo office property in Foreshore, Cape Town.

The portfolio was further optimised through the disposal of the Willows Shopping Centre in Pretoria East, for a purchase consideration of R77.1 million.

During the reporting period Accelerate received approval from the JSE for its R5 billion domestic medium term note (“DMTN”) programme. A senior secured rating of AA-(za) and senior unsecured rating of BBB+(za) from Global Credit Ratings Company (GCR) was achieved.

The local economic outlook remains weak and SA is still feeling the effects of slow economic growth‚ Accelerate Property Fund said on Thursday.

It said the conditions had resulted in greater pressure being placed on consumer spending‚ which in turn placed the retail and commercial property sectors under pressure.

Accelerate said it continued in its growth phase‚ despite the tough economic conditions‚ by offering investors a stable cash flow and consistent capital returns.

“Income and expenses were well managed and this‚ combined with the effect of fixing debt interest rates‚ had a positive effect on profitability‚ which would have otherwise been detrimentally affected by the interest rate hike earlier this year‚” the company said.

Looking ahead‚ the company said it was well positioned to create shareholder value by being a participant in the major development in the Fourways area “making the most of opportunities to acquire properties and ensuring properties are well managed and maintained”‚ thereby ensuring sustainable returns to its shareholders.