JSE-listed real estate investment trust (REIT) Arrowhead Properties achieved distribution growth of 17.9% to 113.24c per combined A and B unit for the financial year ended September 30.
Arrowhead’s revenue, excluding straight line rental income, also increased from R423.25-million at the end of the prior financial year to R712.24-million at the end of the period under review, while its net asset value per A and B linked unit increased from 606c previously to 687c.
The company stated that the year under review had seen a substantial transformation within Arrowhead in terms of size and diversity.
“Arrowhead has successfully continued with its strategy of acquiring commercial assets at yields in excess of its cost of funding, has been at the forefront of the expected consolidation in the real estate sector with the successful acquisition of Vividend and has established Arrowhead Residential, which has acquired a residential portfolio,” the company said.
Arrowhead stated that these factors, in conjunction with the effect of the acquisitions concluded during the prior financial year, had led to the considerable increase in revenue.
Further, during the year, Arrowhead had grown its core property portfolio by 6.9%, and 9.1% with the effect of gearing.
Vacancies within the REIT’s portfolio, excluding the residential vacancy, which was 1.2%, had decreased to 6.26%.
“This is primarily owing to the acquisition of substantially fully let properties together with some reduction in the portfolio at the time of listing,” the company pointed out.
Arrowhead added that the leases of 92 004 m2 of gross lettable area had expired during the year, of which 75.36% had been renewed, with rental escalations of 8.21% having been achieved on renewed leases across the portfolio.
Arrowhead forecast a further 11% distribution growth during the 2015 financial year to 147.9c a combined A and B unit.