Chief executive Marc Edwards said South Africa’s low growth and institutional instability had resulted in a sluggish local economy that has placed downward pressure on rentals.
“The past two years have been the worst in the South African real estate investment trust (Reit) sector’s history, with distributions reducing across the industry. Property is a long-term asset class, and the occasional reduction in rentals and the resultant drop in earnings should be expected by the sector. Outperforming inflation should be the realistic benchmark for any asset manager investing in a Reit,” he said.
The distribution per share fell 7.3percent to 74.2cents per share. The group’s 45 convenience retail, industrial and office properties in South Africa and Croatia, valued at R5.2billion, generated a 13percent increase in revenue to R472million.
Factors increasing revenue included the weakening of the rand against the euro and the sale of the Napier Street units.