Spear Reit outperforms rivals and lifts its distribution by 6.06%
Most other property Reits have deferred dividend payments in order to preserve cash, in the face of the uncertain property market brought upon by store closures and tenant rental defaults due to government interventions in many countries in their efforts to contain the disease.
Chief executive Quintin Rossi said in a presentation yesterday that the firm would have R200 million cash available post the dividend. Low to high-road stress testing had made the group management confident of a mid- to high-road scenario for the 2021 financial year, which would result in continued growth in operating profit and the group comfortably being able to absorb any shocks.
He said Spear would continue to adopt active management strategies for the 2021 financial year to find tenants and fill vacancies that might arise.
Rossi expected also that a strategy of early tenant engagement would result in another year of high tenant retention. No income from the hospitality sector assets was factored into the stress test scenarios.
Spear lifted distributions per share by 6.06percent to 91.66cents per share in the year to February 29 - an outperformance indicated by the fact that many other property Reits have either reported flat, or lower distributions for their latest financial year.
Rossi said Spear had beaten the South Africa listed property sector by 43percent since listing in 2016.
Net asset value per share increased by 0.49percent to 1221cents per share. The focus would remain on Western Cape properties, and “the furthest offshore we will go is Robben Island.” The ortfolio occupancy rate of 97.12 percent and 100 percent was Western Cape based.
The investment property value increased 9.78percent to R4.18 billion, from R3.81bn in the prior corresponding period.
Loan to value increased by 2.09percent to 39.63percent, from 38.82 percent reported at February 29, 2019. Revenue increased by 21.27percent to R527m.
Headline earnings per share increased 12.67 percent to 99.09c per share.
A final dividend of 47.01759c per share was declared from income reserves in respect of the financial year ending February 29, 2020.
The group had two main developments under way. Due to the uncertain market conditions, only the regulatory work would be undertaken for the groups largest project, a mixed use development in Paarden Island, Cape Town.
The R95m redevelopment of No1 Waterhouse Place, Century City, was expected to be completed by June this year, and with some 8 000m² out of 11236m² pre-let, the group was confident of letting out all the space post-Covid 19 lockdown.