CAPE TOWN – Newpark Reit, the property company that has the JSE’s office building in its portfolio, said yesterday that distributable earnings fell 18 percent to 43.3 cents per share in the year to February 28.
Directors said the decline was in line with guidance and due mainly to increasing vacancies in its mixed-use segment.
Newpark has four buildings in Gauteng, two in Sandton, and the portfolio was worth R1.41 billion. Group vacancies increased to 15.7 percent from 11.2 percent in 2018.
A large tenant elected to consolidate its office footprint into their main space.
Expense controls were applied to mitigate the impact, but it was not enough to fully compensate for the impact of this loss of revenue.
The rising vacancies caused revenue to decline 6.2 percent to R127.9 million.
A final dividend of 18.35c per share was declared, well down from the 26.15c final dividend declared at the previous year end.
“In the year ahead, the emphasis will be on filling the 24 Central vacancy, introducing an appropriately empowered partner into Newpark’s shareholder base and searching for acquisitions that offer value,” the management said in a statement.
For the new financial year, Newpark was budgeting for growth of 6 percent to 8 percent in income distribution and “to be well positioned for above average growth thereafter”.