Through “sweating its assets”, JSE-listed Dipula Income Fund achieved 9.5% organic growth in its distributable earnings for the six months ended February 28, to R194.2-million, which further resulted in an increase in combined dividends a share of 6.3%.
The dividend attributable to A-shares increased by 5% over the prior period to 50.6c apiece, while the dividend attributable to B-shares increased by 7.9% to 41.8c apiece.
Vacancies remained at 9.2% compared with the prior period. “This is owing to the challenging market conditions, particularly in the office sector, where vacancies increased from 11.7% in the prior period to 15.1% at reporting date,” the fund stated.
Industrial vacancies reduced significantly to 8.8% from 11.5%, while retail vacancies increased marginally from 7.6% in February 2016 to 7.9% at February 28, this year.
“The current economic environment is one of almost no growth, which has a significant impact on the property sector. The ability to lease new space or expand existing tenants is greatly reduced.
“We expect the current economic conditions to continue in the short- to medium-term and we will continue to focus on extracting the maximum value from the portfolio and reducing the vacancy factor,” Dipula highlighted.
Reflecting the challenging environment, the board expects growth in distributions of between 5% and 6.5% for the financial year ending August 31.
“This growth assumes that macroeconomic conditions do not deteriorate further, no major corporate failures occur and that tenants will be able to absorb rising utility and assessment rates costs,” Dipula added.