JSE-listed real estate investment trust Fairvest Property has grown its distributions by 10.04% year-on-year to 18.33c a share for the financial year ended June 30, exceeding market guidance.
Distribution growth has been higher than 10% for the fourth consecutive year.
Revenue grew by 18.4% to R331.1-million, owing to income growth in the historic portfolio, as well as the acquisitions concluded during the financial year.
A strong focus on cost containment and more efficient recoveries of municipal charges improved the net property expense ratio to 15.5%, relative to 17.3% in the 2016 financial year.
CEO Darren Wilder on Tuesday said the property portfolio’s value had increased by 14.5% to R2.20-billion.
“The growth is attributable to acquisitions to the value of R113.5-million, as well as capital expenditure incurred of R35.7-million, offset by the disposal of the South African Social Security Agency House asset for R40-million,” he said at a presentation of the company’s results, in Johannesburg.
The Fairvest portfolio is geographically diversified across South Africa and comprises 41 properties, with 194 311 m2 of lettable area.
The portfolio features a high national tenant component of 75.3%, tenant retention of 72.8% and a weighted average lease term of 38 months.
Three new properties – the Mqanduli Boxer and Tabankulu Boxer, in the Eastern Cape, and Macassar Shoprite, in the Western Cape – were acquired during the financial year under review.
“While mindful of the prevailing economic and political challenges in South Africa, we believe our portfolio is well-positioned and we remain confident that Fairvest should be able to achieve distribution growth of between 9% and 10% for the 2018 financial year,” Wilder said, adding that the company would also continue to actively pursue yield accretive acquisitions to further enhance the portfolio.
Over the next 24 months, Fairvest will strategically focus on and target retail assets weighted toward rural and community shopping centres in high-growth nodes, close to commuter networks.