Rebosis founder and executive deputy chairperson Sisa Ngebulana said yesterday that the disposals would serve to achieve a more retail bias on the remaining portfolio, in line with the company's stated strategy of being a retail-focused fund. Ngebulana further said that the planned disposals would also assist the company to reduce its gearing to below 35percent as part of a strong focus on its balance sheet management.
Rebosis’ underlying portfolio has grown by 17.9percent to R18.9billion in the six months to end-February.
It comprised six retail assets, a further 42 commercial offices that were largely let to the government and an industrial asset.
Like-for-like growth in the underlying retail portfolio amounted to 7.1percent year-on-year, while the growth was 5.5percent for the commercial portfolio and 7percent for the industrial assets.
The retail assets, comprising a mix of dominant and newly built shopping centres that Rebosis believes were set to dominate in their nodes, particularly the Baywest Mall in Port Elizabeth and Forest Hill City in Centurion, contributed 40percent of net income in the six months to February.
The commercial office assets contributed 59percent and the industrial asset 1percent of net income.
The overall portfolio had a vacancy rate of 3.4percent, with a 1.3percent vacancy rate in the retail portfolio and a 4.6percent vacancy rate in the office portfolio. There were not any vacancies in the industrial asset.
Rebosis yesterday declared a dividend a share of 126.43cents per A-ordinary share and 63.23c per ordinary share for the six months to February.
This amounted to a 5percent period-on-period growth for the A-ordinary share and 4percent period-on-period growth for its ordinary shares.
Distributable income increased by 29.6percent to R504.2million from R389.1m, mainly because of the full consolidation of Ascension Properties.
Ngebulana said the solid distribution growth despite continued macro-economic headwinds spoke to the quality of Rebosis’ portfolio.
“Both the retail and office portfolio have delivered a 6.8percent net property income growth in the reporting period, with positive rent uplift on renewals that indicate good property fundamentals.
“Trading densities at our Eastern Cape malls have outperformed our Gauteng centres and the overall retail portfolio trading density is above the IPD growth average for regional malls for the same period,” he said.
Borrowings increased to R10.3billion from R9.8bn in the prior period, because of the additional shares acquired in New Frontier Properties (NFP) and the funding of an acquisition by NFP in Dublin.
The anticipated dividend from NFP decreased to R33.2m from R63.2m following the disposal of 29.9percent of the shares held by Rebosis in NFP to a broad based black economic empowerment consortium.
Fund management expenses increased considerably to R65.1m from R55.1m, largely because of increased staff costs, because staff bonuses in the prior period were paid by the asset manager and Rebosis.
Ngebulana said going forward the group would accelerate its focus on filling up vacancies and capital recycling, particularly the remaining vacancies at Forest Hill and Baywest.
Rebosis expects year-on-year distribution growth an ordinary share of between 4percent and 6percent for its 2018 financial year.
Rebosis gained 1.22 percent on the JSE yesterday to close at R24.80.
- BUSINESS REPORT