Exemplar Reitail, the listed property fund focused on rural and township retail, declared an interim dividend of 64.272 cents per share for the six months to August 31, 6.47% lower than the same period a year before.
Exemplar’s 26 retail assets have a combined gross lettable area (GLA) of 414 420 square metres.
Revenue increased 16.75% to R581.52 million. Portfolio GLA increased to 414 420 square metres from 407 942 square metres with the opening of the final phase of Edendale Mall after a rebuild.
Growth in rental and recovery income was partially due to the recently added KwaBhaca Mall, Bizana Walk and Mamelodi Square, as well as the opening of the third and final phase of Edendale Mall.
On a like-for-like basis rental and recovery income had increased by 9.7%.
Notwithstanding the resilience that the company’s sector of the market and its portfolio, “we have seen some pressure on the trading densities of our tenants,” the company’s directors said in a statement.
The like-for-like weighted average trading density of anchor tenants for the six months increased by 3.9%.
“The economy and consumers generally are clearly struggling, and disposable income, even for essential goods and services such as those supplied through the tenants in our centres, is being eroded,” the company directors said.
The portfolio vacancy rate was 3.36%. This was slightly higher than target, but largely a consequence of the troubled Acornhoek Megacity. Excluding this centre, vacancies were 2.69%.
Operating costs had increased by R57.67m or 31.8% due partially to the recently added KwaBhaca Mall, Bizana Walk and Mamelodi Square, as well as the opening of the third and final phase of Edendale Mall.
On a like-for-like basis, operating costs increased 17.2%.
“We have seen increases in many of our input costs, including security and cleaning where regulated wage increases have been in excess of inflation, as well as rates and taxes, and of course, diesel.
“Some of these costs are partially recovered from our tenants but naturally the tenants are only able to absorb them to a point,” the company said.
The credit loss provision was also increased by R6.83m. As a result there was an increase in the doubtful debt expense of R10.470m.