Spear REIT, the only regionally focused REIT listed on the JSE, yesterday announced that its full year distributable income per share (DIPS) increased 1.04% to 82.99 cents over the prior financial year compared with the prior financial year.
With cash collections robust at 98.92% for the year, the board declared a final distribution per share (DPS) of 40.53 cents based on a payout ratio for the final six months of 96% of DIPS.
The total DPS came to 78.86 cents, up 3.8%. It marked the first year in which annual gross revenue surpassed R600 million, after increasing by 5.92% through the year.
Spear’s assets were valued at R4.62 billion, with a diversified portfolio of industrial, commercial, retail and mixed-use assets in the Western Cape.
Its directors said yesterday that the results indicated an “against-the-trend, weathering of the storm.”
The listed property sector continues to face challenges due to South Africa's sluggish economic climate, persistent load shedding, albeit in a hiatus, higher-for-longer interest rate environment and the more gradual return-to-office trend.
CEO Quintin Rossi said Spear's Western Cape specialisation was one of the key enablers in achieving the strong financial performance during the 2024 financial year.
To date, more than 55% of the Spear portfolio had PV solar installed. The commissioned capacity generated 7.4MW in the financial year and is forecast to generate just under 8MW of electrical supply, providing up to 24% of Spear's total future energy demands.
The company has a three-pronged approach to its PV Solar rollout, including a combination of capital expenditure installations, roof rental installations with long-dated lease agreements, and instalment sale installations.
On March 28, 2024, Spear entered into acquisition agreements with Emira Property Fund to acquire 13 Western Cape fund-quality real estate assets.
Rossi said they expected there to be net operating income (NOI) growth at property level in the year ahead, but the extent of distributable income growth in the form of a forecast at this point was difficult to quantify given the higher-for-longer interest rate environment, operating cost creep, and the impact of load shedding in South Africa in the year ahead.
BUSINESS REPORT