Property assets lift Rebosis' fortunes

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Rebosis Property Fund CEO, Sisa Ngebulana says the distribution growth was mainly as a result of continued organic growth in our existing portfolio. Rebosis Property Fund CEO, Sisa Ngebulana says the distribution growth was mainly as a result of continued organic growth in our existing portfolio.

Rebosis Property Fund organic growth, bolstered by the group’s interest in its listed subsidiaries locally and the UK, cited as main reason behind earnings surge.

The company on Thursday, declared a 56.79c per share dividend for the six months to end February —  which was 8.26% higher than the previous year’s interim dividend.

Its interim profit grew nearly eightfold to R1.4bn from R181m.

Retail vacancies increased to 3.4% from 3.1% due to the collapse of Platinum Group, a clothing chain whose brands included Aca Joe, Hilton Weiner, Jenni Button, Vertigo and Urban.

Last year, Platinum Group's store base plummeted from its original fleet of 68 stores nationwide to just five flagship stores at Umhlanga’s Gateway Theatre of Shopping in KwaZulu-Natal. The clothing chain failed to grow turnover in a tough consumer environment in which spending is under pressure which also affected shopping mall owner, Hyprop Investments. Hyprop which owns Hyde Park Corner, Canal Walk and Clearwater Mall took legal action against the group because of a contractual breach.

Rebosis' office vacancies reduced to 1.7% from 3.2%. Its offices were primarily let to the Department of Public Works under long leases with an average annual escalation of 8.5%.

At the close of the interim reporting period, the Fund’s assets were valued at R11,8 billion of which the value of Rebosis’ direct properties comprised R8,0 billion. The holding of 59% in Ascension Properties Limited and 67.5% in New Frontier Properties represented listed property securities of R3,8 billion.

At a company level, Rebosis’ loan to value decreased from 35.7% to 33.7% supported by the value uplift following independent property valuations.

The group’s debt increased to R4,1 billion as a result of its increased investment in New Frontier. Higher interest rates on the additional debt increased the weighted average cost of borrowings from 8.2% to 8.7% for the review period. Currency swaps and fixed arrangements were in place for 75.8% of the debt at period end, with 85% of debt subsequently fixed after the reporting period.

Last year, Rebosis acquired 62.0% of New Frontier for a total purchase price of R1,18 billion, which was increased to 67.5% during the review period.

New Frontier has three high-street retail centres, in Burton-on-Trent and Middlesbrough with the acquisition of Houndshill Shopping Centre in Blackpool concluded during the reporting period.

Commenting on the group’s prospects, Rebosis CEO, Sisa Ngebulana concluded: “We will continue to identify and acquire quality assets in line with our investment guidelines with a medium to long-term focus on the retail sector.”

Rebosis maintained its distribution guidance range for the 2016 financial year at between 8% and 10% above that of the prior financial year.


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