Rebosis Property Fund said total distributable earnings fell by R101 million to R226m in the year to August 31. Picture: Nicholas Rama
CAPE TOWN -  Rebosis Property Fund, the JSE’s first listed black-managed REIT said total distributable earnings fell by R101 million to R226m in the year to August 31, mainly due to historic bad debts being written off, taxation, increased professional fees relating to property disposals and the early settlement of cross currency swops.

The retail portfolio continued to perform well, with trading density growth of 5.4 percent and an increase in footfall of 2.5 percent, indicating market share gain despite vacancies increasing by 6.5 percent.  The share price rose 10 percent to 33 cents Monday morning.

No distribution was declared to preserve capital and bolster the balance sheet.

There was a 100 percent success rate of lease renewals on large office expiries of over 200 000 square metres GLA (gross letting area) in the reporting period, a good trading density as well as  robust footfall growth in the retail assets, well above industry averages, said CEO Dr Sisa Ngebulana:

“This period has focused mainly on driving an improvement of our operating performance and hence, quality of our underlying assets from our asset management team.

Growth on retail assets continue to outperform in all areas due to “bold drives in our marketing and overall  management,” he said.

“We have incredibly dominant and scarce retail assets and our office assets are well maintained and the positive renewal cycle bears testimony to well looked after buildings and tenants.”

 The 60 907 square metres of renewals remaining relate to historic leases of four buildings with Tshwane, Western Cape Province Department of Public Works and KZN Province, whose tenants are in occupation and should conclude negotiations in the next 6 months.

“The focus now turns to fulfilling our intent on disposals as several disposals announced during the year were contingent on the renewal of leases, and with these now achieved, we are confident that the disposals will be concluded in this current financial year,” he said.

The board deemed it prudent to retain distributable income to preserve capital and hence assist with the deleveraging of the business.

Going forward, the group would continue to focus on efficiencies, renewal of office leases, conclusion of disposals, and the de-leveraging of the balance sheet from its current 60.9 percenrt by way of a capital raise once the merger with Delta Property Fund was concluded.