Roy Cokayne

Vividend, the listed property company that is the target of a takeover by listed Arrowhead Properties, reported an 11 percent decline in distributions a linked unit to 24c in the six months to February from 27c in the previous corresponding period.

It said on Friday the distribution a linked unit for the period was in line with the forecast distribution published in its rights offer circular issued in May last year and 4.4 percent higher than the distribution of 23c a linked unit in the previous six-month period to August last year.

The company said it expected to achieve a distribution of 50c a linked unit for the year to August, which would be in line with its forecast in its rights offer circular, subject to existing economic conditions continuing and its property portfolio continuing to perform in line with current forecast expectations.

Total revenue grew by 43 percent in the six months to February to R141.49m from a year earlier. The company attributed this growth largely to the inclusion of revenue from the Access Park and Beka Industrial Parks acquisitions, the inclusion for the full reporting period of revenue from its Sasol Kent Street acquisition and contractual rental escalations at 7.74 percent at the end of February within its property portfolio.

Vividend concluded the acquisition of Beka Industrial Parks for a total of R141.5m effective from December 1 last year, which added 22 169m2 of gross lettable industrial space to its property portfolio.

It did not conclude any other property acquisitions during the reporting period and did not dispose of any properties.

Vividend, which has a portfolio of 24 directly owned properties valued at R2.22bn, reported that vacancies increased during the period to 7.7 percent from 5.5 percent.

It said the increased vacancies in the property portfolio were largely due to the expiry of a material lease within its Owl Street Milpark property from May 1 last year.

Arrowhead has proposed to acquire all the issued linked units in Vividend for a consideration of not less than 0.374 Arrowhead A and 0.374 Arrowhead B units for every Vividend linked unit in terms of a scheme of arrangement.

This minimum offer matches the consideration for Coronation’s 31.7 percent holding in Vividend, which Arrowhead acquired in December.

Arrowhead also acquired effective from the beginning of February the equity in Vividend Management Group, the external asset manager of Vividend, for R88.6m.

Its offer for the linked units in Vividend it does not already own is subject to several conditions, which if fulfilled will result in the implementation of the scheme from August 31.

Vividend linked units closed unchanged at R5.15 on Friday.