Successful capital raises of R206.7-million, attractive acquisitions and steady growth in property valuations contributed to Fairvest Property Holdings’ net asset value increasing by 20.8% to R1.60-billion for the six months ended December 31.

This was paired with distributions increasing by 9.57% year-on-year and a net asset value per share increase of 1.9% to 205.5c apiece, relative to a current share price of 185c.

The company in a statement on Thursday said that annualised net property income increased by 10.4% year-on-year, a function of low vacancies at 4.1%, selective acquisitions, cost containment, as well as gross rentals that trended upwards across the portfolio.

Fairvest further declared an interim dividend distribution of 8.95c a share for the period, which was within the issued guidance range of 9% to 10% growth.

“We are pleased that Fairvest’s consistently good performance over the past few years is providing shareholders with the type of returns that have positioned the company as one of the top performing property funds over the last year.

“Our focus is to steadily deliver on key performance metrics, which include solid distribution growth, value-adding acquisitions and a strong emphasis on operational excellence,” said CEO Darren Wilder.

Fairvest focuses on retail assets weighted toward nonmetropolitan and rural shopping centres, as well as convenience and community shopping centres servicing the lower living standards measure market, in high-growth nodes and close to commuter networks.

The Fairvest property portfolio is geographically diversified across South Africa and comprises 41 properties, with 193 580 m² of lettable area and valued at R2.08-billion. The portfolio features a high national tenant component of 76.6%, tenant retention of 79.1% and a weighted average lease term of 40 months.

Revenue grew by 20.6% to R162.2-million, owing to income growth in the historic portfolio, as well as the acquisitions during the period. Weighted average gross rentals increased by 3% to R102.36/m² at December 31, compared with R99.40/m² as at June 30.

Costs were well contained with the net property expense ratio improving to 16.3%, compared with 17.3% for the previous financial year, which was further supported by a strong focus on cost containment, as well as more efficient recoveries of municipal charges.

Distributable earnings increased by 29.8% to R69.8-million.

Wilder said the property portfolio value increased by 8.2%, aided by a R111.9-million acquisition during the period and capital expenditure of R17.9-million. This was offset by the disposal of the South Africa Social Security Agency House asset for R40-million.

Fairvest’s historic portfolio increased by 4.1%, compared with June 30, 2016, with the average value per property having increased by 2.9% to R50.8-million, while the average value per square meter increased by 3.9% to R10 756/m².

During the period under review, 32 new leases were concluded on 7 077 m². Renewal activity was positive with a 7.9% positive reversion achieved on the 16 107 m² of leases that were renewed during the period.