Dipula unit holders gain on positive results

Dipula Income Fund CEO, Izak Petersen attributed the positive results to strategic growth with portfolio enhancing assets and continued management interventions which improved its leasing performance.

Black-managed JSE-listed REIT which has a property portfolio worth R5.7bn, Dipula Income Fund on Wednesday increased its distributable income to unit holders.

The company grew its distributions per combined unit by 6.8% in the six months to February, which comprised distribution growth of 5.0% per Dipula A linked unit and 9.3% per Dipula B linked unit.

Total revenue rose by 24.6 percent to R300.73m from R241.35m.

Its portfolio is set to grow by a further R1 billion by the end of 2015 as it executes its pending pipeline of acquisitions and developments.

Among the acquisitions Dipula concluded are Umzimkhulu Mall in KwaZulu-Natal, Corporate Park Industrial in Polokwane , Wadeville Industrial and Hyde Close office building in Hyde Park.

The company’s CEO, Izak Petersen attributed the solid financial performance to its strategic growth with portfolio enhancing assets and continued management interventions, which improved its leasing performance.

Dipula concluded R742 million acquisitions and also took transfer of R534 million of properties during the half-year period.

The Fund has a diversified portfolio of 176 retail, office and industrial properties throughout South Africa, with majority in Gauteng.

Overall vacancies decreased to 7.3% from 9.6% as at the end of the half year period, with office vacancies decreasing to 11% vacancies from 19%. Its industrial vacancies improved to 2%. Retail vacancies were reduced to 8% after 75% of the space vacated by Ellerines and was subsequently re-let.

During the period, the company reported rental escalations of 7.9% and a 68% tenant retention across its property portfolio.

Post the half year period, Dipula internalised a substantial portion of its property management, and expects to realise future cost savings and efficiencies as well as improved property management.

Listed property manager of Old Mutual Investment Group’s MacroSolutions boutique, Evan Robins, said the results were "pedestrian" but the decrease in overall vacancies from 9.6% to 7.3% was positive.

Notwithstanding South Africa’s slow economic growth putting more pressure on tenants, particularly small, medium and micro enterprises, the company is expecting combined distribution growth of between 6.5% and 7.5% for the 2015 financial year.