CAPE TOWN - Investec Australia Property Fund (IAP) proved resilient through Covid-19 and distributed 4.39 Australian cents per unit for the six months to September 30.
Net asset value increased to AU$1.34 per unit, up from AU$1.32 per unit at March 31. IAP CEO Graeme Katz said initiatives in late 2019 and early 2020, designed to strengthen the balance sheet, had enabled the Fund to navigate a challenging period and deliver a solid result.
Directors said in an online presentation Australia had handled the Covid-19 crisis better than most countries, but uncertainty still prevailed as tenants tried to find their feet.Balance sheet strength had positioned IAP to take advantage of opportunities when they arise.
Gearing was at 22.4 percent, the weighted average debt expiry was 7 years, no debt would mature until the 2023 financial year, and there was AU$70 million of undrawn debt available.
He said the property portfolio had performed well off the back of strong leasing activity that saw 38 002 square metres of space leased or subject to signed heads of agreement.
“The asset management team continues to deliver strong leasing outcomes by focusing on hands-on active management of both our properties and our tenants. In addition, we have collected 99 percent of rent over the period despite Covid-19, preserving the long term sustainability of the Fund’s income,” said Katz.
The Fund’s portfolio of metropolitan office and industrial properties had proven relatively resilient given the continuing market uncertainties. The significant majority of the Fund’s tenants were government, listed or multinationals, with very limited exposure to tenants in the retail and consumer discretionary sectors.
The portfolio now comprises 30 properties valued at AU$1.1 billion. The Fund had entered into an agreement with Investec Group to internalise the management of IAP and to acquire a funds management platform. Investec group would receive AUD40 million in terms of the agreement.
Katz said the internalisation proposal was expected to deliver unitholders a number of benefits, including an enhanced corporate governance framework, alignment of interest, continuity of management and the potential for increased investor participation.
It also provided IAP with the opportunity to build out a funds management platform which would provide diversification of income streams.
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