File picture: James White
File picture: James White

Investec Australia Property Fund can't assess impact of Covid-19 yet

By Edward West Time of article published May 6, 2020

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CAPE TOWN -  Investec Australia Property Fund (IAP) said it was not yet possible to assess the impact of the Covid-19 pandemic on its operations for its 2021 financial year, but the balance sheet was strong and it held a defensive property portfolio, directors said on Wednesday.

Listed REITs have in recent months faced financial stress from mainly retail store tenants not being able to pay rents, due to lockdowns and other measures imposed by governments around the world to help slow the infection rate of the Covid-19 virus.

IAP, which has a property portfolio valued at A$1.1 billion, listed on the Australia Stock Exchange in May 2019, raising A$161m, and an oversubscribed institutional placement raised A$84m in September 2019.

Three industrial properties were acquired for $81mn in October 2019, while 757 Ann Street was sold for $94m in April 2020, 11 percent above book value. Portfolio occupancy was at 99 percent and average lease expiry was 4.5 years. The share price was unchanged at R12.80 on the JSE Wednesday morning.

The group said its defensiveness arose from holding office and industrial properties, while most of its tenants were in government, listed or multinationals - these tenants were less likely to default on their rent.

Gearing was low at 22.2 percent, it held A$17m in cash and A$67m in undrawn debt facilities. There were no funding debt maturities until the 2023 financial year.

In the year to March 31, 2020, revenue increased 12.9 percent to A$101.1 million from A$89.5m, while operating profit was higher by A$1.8m to A$66.1m.

However, the distribution per unit fell by 7 percent from 1.14 cents per unit to A$9.09 cents per unit.

Net asset value per unit increased 1.5 percent to A$1.32 from A$1.30.

The group said it remained well positioned to take advantage of acquisition opportunities.


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