Texton Property Fund, the REIT that offers shareholders access to global direct and indirect real estate investments, said on Friday that distributable earnings fell 45 percent to R91.65 million in the year to June 30, amid substantial new investments and after vacancies in its local portfolio doubled.
The company, which owns property valued at R2.6 billion and an international property investment portfolio of R485m, declared a 17 cents a share dividend, which was 54.6 percent lower than last year.
Its owns commercial, industrial and retail properties, as well as a 50% share in Broad Street Mall, which was sold on June 24, 2022, the company’s results showed on Friday.
The company said it was reinvesting heavily in its direct property investments which are located in central nodes in both South Africa and the UK.
Some R31.2m was invested to protect capital value in a rapidly changing office environment. There was also continued investment in the small, medium enterprise (SME) strategy - texspace.co.za, which makes lease offerings to SME tenants in South Africa (SA), and had proven “popular” with tenants looking for a flexible A-grade offering in Texton’s office parks.
Vacancies in the SA portfolio increased to 22.3% from 10.5%, mainly due to non-renewal of the Transnet Ports Authority lease, and other single-tenanted buildings consolidating and reducing office space.
Collections in SA were at a healthy 97%, with the UK portfolio at 100%.
Internationally, five investments were made with a total capital commitment of $35.1m (R573m), of which $28.5m (R464.4m) had been invested.
Some $12.5m (R188.2m) was invested in Blackstone Real Estate Income Capital Offshore Access Fund, providing Texton with access to the US property investment market with a bias towards multi-family and industrial property investments.
$12m was allocated to the Starwood Real Estate Trust Offshore Fund, also providing exposure to the US property investment market with a similar bias towards multi-family and industrial property investments.
Five million dollars (R81.5m) was allocated to Cadre, of which $1.1m (R17.9m) had been invested in three investment properties in the US. also with a bias towards multi-family property investments.
Two smaller commitments were made to a last mile logistics fund that specialises in environmentally friendly solutions for this sector.
Texton repurchased 9.63 million shares at an average R3.41 per share - repurchases would continue as shares become available.
Six of the eight properties held for sale were transferred for R410m, bringing asset sales over two years to R1.12bn. These sales enabled Texton to recycle capital from directly held non-core assets into international property investments and to strengthen the balance sheet.