IAP delivers a 'pleasing' maiden result for investors
CAPE TOWN – Investec Australia Property Fund (IAP) reported an interim distribution of A$3.20 (R32.01) per unit, pre-withholding tax, for the five months to September 30, 2019, in its maiden results since listing on the Australian Stock Exchange in May.
Funds from operations for the full reporting period of April 1 to September 30 were A$4.98 per unit. IAP is dual-listed in Australia and on the JSE.
IAP chief executive Graeme Katz said yesterday that the fund had delivered a “pleasing result” due to the “continued strong underlying performance of the property portfolio”.
The fund also raised A$161 milllion in conjunction with the listing through the issue of new units and the sale of existing units owned by a large unit holder at a subscription price of A$1.32 a unit, above the minimum subscription price and the fund’s net asset value at the time of A$1.30 a unit.
In September, an institutional placement raised a further A$84m at A$1.52 a unit. Proceeds were used to acquire three industrial properties valued at A$81m, which increased the fund’s industrial exposure from 23 percent to 27 percent.
“The fact that both the capital raising done in conjunction with the ASX listing and the subsequent institutional placement were significantly oversubscribed validates the decision to seek the dual listing, and has resulted in a strong unit price performance since the date of the listing,” said Katz.
The fund’s occupancy rate had improved to 99.9 percent.
“Since April 1, 2019, we have entered into leases of more than 18 456m² and have signed heads of agreement over a further 14 463m². This equates to about 11 percent of the portfolio by area and only 368m² remains vacant across the entire portfolio of 343 000m². More than 54 percent of leases now expire after five years, providing long-term visibility of income for investors,” Katz said.
The portfolio comprises 31 properties valued at A$1.18 billion versus A$1.06bn previously, with an underlying net asset value of A$1.33 per unit, up from A$1.30 per unit on March 31, this year.
Due to the recent capital raisings and a valuation uplift of A$39m for the period, gearing sits at 26.8 percent, meaning the balance sheet is well positioned for growth. The fund reaffirmed its 2020 annualised distribution guidance of 8.88 cents a unit. IAP's share price closed 0.06 percent higher at R16.11 on the JSE yesterday.