Despite pandemic turmoil, Resilient Reit dishes out dividends

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JSE-listed Resilient Reit, which is led by CEO Desmond (Des) de Beer, managed to declare a 202.7 cents a share dividend. JSE-listed Resilient Reit, which is led by CEO Desmond (Des) de Beer, managed to declare a 202.7 cents a share dividend.

Resilient Reit, which has one of the strongest balance sheets in the listed property sector, posted commendable results for the six months to December 31, 2020, despite weak consumer sentiment.

The dismal results reported by JSE-listed property stocks in recent weeks underscore the extent to which Covid-related trading restrictions have hobbled these companies’ predictable dividends.

Mall owners, who in recent months have heavily subsidised their struggling retail tenants via rental discounts and deferrals, have been particularly hard hit.

Resilient Reit, which owns a portfolio of South African retail centres worth about R24bn, managed to declare a 202.7 cents a share dividend, a period when many other listed Reits have not paid dividends.

Its dividend per share for the six-months ended December 31, 2020, is 24.4% down on its comparative half-year (ended 2019), when it paid out 267.96 cents per share.

In addition, the dividend payout ratio is being held at 100 percent — many other Reits have lowered this to preserve cash for their operations in the uncertain economic environment. However, Resilient provided no guidance for the year end due to Covid-related economic uncertainties.

On Tuesday, fellow Reit Attacq became the latest counter to withhold its interim dividend, in-line with the likes of Hyprop and Fortress.

In the interim period, 95 percent of rentals and bills were collected. The support of tenants with sustainable business models continued.

“The pandemic has accelerated many trends affecting retail properties including the decline of department stores, improved logistics resulting in more efficient use of retail space, changes in demographics and in brand preferences, increased spend on groceries as a proportion of retail sales as well as the demand for increased convenience by customers,” the group said.

Resilient had initiatives in place for all its centres to continue to operate into the future. “A number of retailers, however, might not recover from the impact of Covid,” the group said.

Fortunately, other established retailers and new entrants are seeking to expand their footprints, particularly in non-metropolitan markets. These include Studio 88 group, Webbers, Refinery, Ackermans Woman, Polo, Fashion Fusion, Code, Bathu and Drip.”

Some R15.2m of the arrears at December 31 had been collected and R14.3m was expected to be recovered on conclusion of the Edcon business rescue process.

The listed investments contributed R123m less towards distributable earnings after NEPI Rockcastle and Lighthouse were impacted by Covid-related restrictions.

In addition, NEPI Rockcastle reduced its payout ratio.

The comparable results included R374.7m of revenue from Resilient's listed investments.

Results were further impacted by above-inflation increases in administered prices, particularly utilities and rates.

Resilient benefited from R127m of interest earned on the €221m cross-currency swops, as well as R19m of capitalised interest.

Net asset value was down 17.54 percent to 50.60c a share. Loan-to-value ratio was at 33.7 percent versus 27.2 percent previously.

Resilient owns a portfolio largely comprises retail centres with a minimum of three anchor tenants, and lets predominantly to national retailers such as Shoprite, Pick n Pay and Foschini.

The company also owns stakes in European retail landlord Lighthouse Capital and East European mall owner Nepi Rockcastle. Nepi Rockcastle is the largest retail landlord in central and eastern Europe.


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