Rebosis Property Fund aims big with Shopping Centres

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Rebosis Property Fund which recently internalised its asset and property-management entities, on Monday, reported a net property income growth of 74,6% for the six months ended 28 February 2017. Rebosis Property Fund which recently internalised its asset and property-management entities, on Monday, reported a net property income growth of 74,6% for the six months ended 28 February 2017.

Retail-focused real estate investment trust Rebosis Property Fund, has concluded a transaction valued at R5 billion, acquiring two large regional malls — Baywest Mall in Port Elizabeth and Forest Hill in Pretoria.

The black managed Real Estate Investment Trust (REIT) which recently internalised its asset and property-management entities, on Monday, reported a net property income growth of 74,6% for the six months ended 28 February 2017.

The company declared a dividend of 60.08c per share for the period that reflected 7.07% dividend growth. This was in line with the 7%-9% guidance expected for the financial year.

Total distributable income increased 32.7% to R389m from R293m. Following various acquisitions, assets under management rose 51% from R11.8bn to R17.9bn.

CEO Sisa Ngebulana, said, “We achieved exciting growth in both total assets and income during the 6-month period under review. We were also able to hedge 100% of our debt and extend debt maturity profiles in order to mitigate potential risks that arise as a result of a market downgrade and low economic growth.”

Rebosis’ retail portfolio makes up 62% of its South African assets and consists of six shopping malls. Its office portfolio consists of 14 buildings.

“We saw strong retail performance despite a depressed retail sales environment. This performance was largely led by Baywest Mall, which held the highest trading density growth at 11.6%, and Bloed Street Mall. Alongside this performance we reduced our retail vacancies to 1.5% in the reporting period,” says its chief operating officer, Andile Mazwai.

Rebosis also concluded the acquisition of Ascension Properties which led to the listing of the Rebosis-A shares at a market capitalisation of R1.6bn.

The completion of this acquisition consolidates Ascension Properties under Rebosis’ direct properties and has bolstered the Rebosis asset portfolio by a further R17.9 to R21.3bn.

Garreth Elston of Golden Section Capital said Rebosis’ strong management had put it on a positive track.

"Rebosis has made substantial progress on advancing the business. This set of interim results is a solid indication that the company is on the right track. Having 62.3% of the portfolio in retail assets and 36.6% in government-tenanted offices, plus 100% of its debt fixed does result in a very defensive portfolio that should see the company weather the current economic uncertainty.

"The only area we are a little concerned about is the company’s present loan-to-value (LTV) ratio of 41.8% as we believe it is tending towards the higher end, but the company does have several properties up for sale which if concluded should see the LTV ratio come down to a more prudent level," he said.

Read more on:

Retail Property  |  Rebosis Property Fund  |  Ascension Properties Limited  |  Sisa Ngebulana  |  Forest Hill City  |  Baywest Mall  |  Garreth Elston  |  Andile Mazwai
Nedbank Corporate and Investment Banking

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