Hadley Dean, the chief executive of EPP, said yesterday that they would also assess the quality of their retail portfolio for possible recycling as it grew to align with the strategy of owning high quality assets that could continue to deliver growing income streams.
EPP owns and operates 444000m² of gross retail lettable area and 137000m² of offices, excluding joint ventures.
During its 2017 financial year, it added 124000m² of gross retail lettable area through completed acquisitions.
EPP reduced its exposure to offices in December with the sale for 160million (R2.35billion) of three office properties - A4 Business Park, West Gate and Tryton Business House.
Dean said three further offices were in the process of being sold, with the proceeds from the office disposals used to fund retail acquisitions, such as the acquisition in December of the M1 portfolio to a total of 692m, which would add 12 major shopping centres and retail parks to the portfolio by 2020.
This M1 portfolio was acquired from Chariot Top Group, a consortium in which JSE-listed Redefine Properties has a 25percent shareholding.
The transaction has been divided into three tranches, with the first tranche successfully concluded in January this year with the acquisition of M1 Czelad, M1 Kraków, M1 ódz and M1 Zabrze.
During the year to December, EPP also acquired the Blackstone portfolio in June, comprising Galeria Twierdza in Klodzko, Galeria Twierdza in Zamosc and Galeria Wzorcownia in Wloclawek, all in Poland, for a total asset value of 142m; the 24000m² Galeria Solna in Inowroclaw, Poland, in July for 55m; the 27000m² Zakopianka Shopping Centre in Krakow in Poland for 53m; and the A4 Business Park Phase III and O3 Business Campus Phase II.
Yesterday EPP reported a 125percent growth in distributable earnings to 76.6m in the year to December, from 34m in the previous year. This translated into distributions of 10.87eurocents a share, 87percent higher than the 5.8 euro cents a share in the previous year.
Net Asset Value (NAV), excluding deferred tax, increased by 39percent to 928m in the year. This equates to NAV a share of 1.32, which is 16percent higher than the previous year.
Dean said the pleasing results were driven by continued solid macroeconomic conditions in Poland and growth in consumer spending.
“Footfall in our centres is up 4.6percent compared to an increase of 3percent in the prior year, with sales up an impressive 7percent compared to 3percent in 2016,” he said.
Retail vacancies declined to 1.41percent from 1.63percent.
Dean remained upbeat about growth prospects in Poland in the year ahead.
Shares in EPP rose 3.79percent on the JSE yesterday to close at R17.82.
- BUSINESS REPORT