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Real estate investment trust (REIT) Equites Property Fund has declared a maiden distribution of 20.4c a share for the six months ended August 31, some two months after listing on the main board of the JSE.
In April, the property group concluded agreements to acquire seven property-owning companies, as well as nine rental enterprises, which culminated in the successful listing of the group’s shares on the Johannesburg bourse on June 18.
As described in its pre-listing statement (PLS), Equites acquired certain subsidiaries with effect from March 1 and the results for the period ending August 31, therefore, reflected the trading activity of these subsidiaries from this date.
The company outlined in a results statement on Friday that the initial dividend exceeded the expected distribution of 19.9c a share set out in the PLS by 2.5% for the three months ended August 31.
“This equates to an initial yield of 8.1% and the yield for the nine months ending February 28, 2015, is now forecasted as 8.2%, compared with the 8.1% noted in the PLS,” it outlined.
The company added that it had invested surplus cash in a money market investment that had an exposure to African Bank Investments’ senior debt, which resulted in a capital loss of R1.4-billion.
This amount had, however, been added back for the purposes of computing the dividend declared.
The REIT ended the six months with a net asset value a share of R10.09.
POST-PERIOD ACQUISITIONS
Equites, meanwhile, acquired several properties after August 31, including an A-grade distribution facility, known as Crossroads, in Cape Town, for a 9% yield with an agreed property valuation of R42-billion.
The tenant, Crossroads Distribution, was contracted to transport petroleum from the Chevron refinery, in Milnerton, to the Cape Town International Airport. There were a further nine years left on the lease.
The REIT also acquired a 13 343 ha property in Epping Industria at an 11.5% yield for R18.1-million.
“This property is ideally located for an industrial distribution warehouse and the company intends redeveloping this property in due course. It is currently tenanted on short-term leases and generating yield-enhancing rental income prior to redevelopment,” it noted.
A 9 977 m2 property in Bellville was also acquired by the group at a 12% yield for R12.6-million.
“The above acquisitions are in line with the company's strategy to focus on brownfield development opportunities, which entail acquiring strategically located parcels of land with B- or C-grade tenanted buildings.
“This provides short-term yield-enhancing income combined with medium-term redevelopment opportunities,” it outlined.
Equites drew down on its R600-million loan facility with Nedbank for the first time in September and would look to hedge a portion of the interest rate exposure once the outstanding loan balance approached R150-million.
In the medium term, once the loan balance reached R500-million, the company aimed to have hedged around 80% of the interest rate exposure.
Equites intended to grow its property portfolio to R4-billion within five years.