Accelerate FY distribution up 49.21c vs 13.77c

Accelerate Property Fund sees its distribution per share jump to 49.21c for the full-year ended March 2015 from 13.77c.

Accelerate Property Fund on Monday saw its distribution per share jump to 49.21 cents for the full-year ended March 2015 from 13.77 cents, despite anaemic economic growth in SA and abroad.

Commenting on the results, the company said its distribution per share was in line with its forecast of 49.19 cents.

Accelerate reported a profit after taxation of R741.05 million and a distributable profit of R298.82 million, which was higher than the forecast distributable profit of R289.68 million for the year ended March 2015.

The variation between profit before taxation and distributable profit was as a result of a fair value adjustment relating to property valuations of R441.6 million, a mark to market movement of R60.6 million on financial instruments, a straight lining adjustment of R49.1 million and a capital profit of R12.1 million on the sale of a centre.

Accelerate's projected annualised yield of 7.9% is above the overall property sector yield.

It earned a gross rental income of R699 million for the year from R205 million. This comprised net rentals of R528.7 million (2014: R160,7 million) and included R171 million (2014: R44 million) of operating expense recoveries.

Accelerate said the global and local economic outlook remained weak and South Africa was still feeling the effects of slow economic growth.

"The impact of the interest rate hike earlier in 2014 has increased pressure on consumers to service debt and all indications are that there may be further interest rate increases. Coupled with increasing inflation rates, this will result in greater pressure on consumer spending. These negative factors will also place the retail sector under pressure," Accelerate said.

The company said the listed property sector had recently undergone a fair amount of consolidation. "The listed property sector continues to offer investors a stable cash flow and consistent capital returns," it added.