Despite an “extremely tough operating environment”, characterised by a weak economy, the electricity and commodity crisis, job losses, labour unrest and low consumer confidence levels, Growthpoint Properties posted distribution growth of 7.5% for the year ended June 30, exceeding R4-billion for the first time.

The company’s property income in South Africa grew 24% to R4.5-billion, up from R3.6-billion in the prior year, and contributed 75.8% to its total distributable income, while the 65%-owned Growthpoint Australia grew its income by 14.8% to R1.6-billion.

Revenue from the V&A Waterfront contributed 8.7%, or R368-million, to Growthpoint’s total distributable income, and was up 10.8% from the prior year, despite a slowdown in tourism.

This performance was driven by continued good results from the retail properties. Year-on-year retail turnover at the V&A Waterfront was still in the double digits at 11%. Overall vacancies remained low at 2.6%.

“The Western Cape seems to be an economy and country of its own, as it functions differently to the rest of South Africa,” CEO Norbert Sasse quipped during a presentation of the company’s results, in Johannesburg.

He attributed the positive results to the solid performance from Growthpoint’s investments as a whole, as well as rigorous cost containment, which saw its South African property cost-to-income ratio tighten from 24.8% to 24% and its overall expense ratio improve from 28.6% to 27.8%.

Overall vacancies increased from 4.9% to 5.7% during the year, with increased vacancies in its industrial portfolio, which moved up from 3% to 5.3%, largely as a result of the demise of furniture company Ellerines.

However, retail vacancies improved from 4.5% to 3.3% and its office vacancies remained steady at 8%, outperforming the South African Property Owners Association national office vacancy benchmark of 10.6%.

Growthpoint expected its 2016 dividend growth per share to be between 5% and 6%.