FAIRVEST increased its total distribution a linked unit by 30 percent to 13.72c in the year to June from 8c the previous year, the listed specialist property company said yesterday. The distribution exceeded the guidance issued to the market of 13.7c a linked unit.
Fairvest owns and manages a portfolio of 32 properties comprising 125 520m2 of lettable area valued at R1.1 billion. It focuses on retail assets in non-metropolitan shopping centres and convenience, community and regional shopping centres servicing the lower living standards measurement market in high-growth nodes and close to commuter networks.
Darren Wilder, the chief executive, said yesterday that they were pleased with the progress the group had made in the past year, extracting value from the current property portfolio and adding four attractive properties to sustain future value creation.
Fairvest acquired four properties from listed Vukile Property Fund effective from January. The acquisition was funded through the issue of 167.87 million ordinary linked units to Vukile at an issue price a unit of R1.40, enabling Fairvest to raise R235 million of new equity.
The transaction gave Vukile a 31.5 percent shareholding in Fairvest and subsequent to this transaction Vukile increased its stake to 32.2 percent through the acquisition of a further 2.1 million Fairvest units in the market.
Fairvest increased revenue 175 percent to R149m in the year to June, as a result of income growth in its historic portfolio and the acquisitions.
Net profit from property operations increased 164 percent to R99.8m.
Administration expenses grew 62 percent to R10.1m.
Vacancies reduced to 7 percent from 9 percent, despite the 24.8 percent increase in gross lettable area.
Weighted average rentals across the portfolio improved by 6.2 percent to R86.40 a square metre in June.
Net asset value a linked unit rose almost 5 percent to R1.59 in the reporting period from R1.519 in the previous year.
Wilder said Fairvest’s portfolio of high grade national and regional anchor tenants, strong tenant retention and healthy renewal escalations boded well for the steady creation of value for its unitholders.
He said despite the economic environment remaining challenging with slower economic growth and rising interest rates, Fairvest was in a healthy position for the delivery of future prospects. These had been further strengthened by the improvement in the portfolio and tenant mix and the acquisition of quality assets.
Wilder said investors had enjoyed an attractive annualised return of 18.9 percent since Fairvest’s recapitalisation in December 2012.
He was confident distribution growth of between 9 percent and 10 percent would be achievable in the 2015 financial year.
The linked units closed unchanged at R1.40 yesterday.