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As JSE-listed Texton Property Fund emerged from a “busy and positive year”, the real estate investment trust posted a 10.6% rise in distribution a share to 85.47c for the year ended June 30.
The group, formerly called Vunani Property Investment Fund, performed “exceptionally well” during the year under review given the tough market conditions, said Texton CEO Rob Kane.
Vacancies improved from 5.6% during the 2013 financial year to 5.3% on a total gross lettable area of 190 116 m2, while tenant retention remained high at 82.5%.
Further, rent collection improved to 98%, with “very little” new arrear rentals.
“Our average lease expiry of 3.96 years, coupled with average escalations at 8.6%, give the fund a very stable platform for the future,” Kane noted.
Texton’s investment property income increased 25.3% from R216.9-million in 2013 to R271.8-million in the year under review, owing to contractual rental escalations and the property acquisitions made during the year.
Investment property income comprised rental income of R215.1-million and recoveries of utilities from tenants of R56.7-million.
Kane also pointed to an improved ratio of net property expenses to rental income, which narrowed from 17.1% in 2013 to 15.3% as a result of tight cost management.
Meanwhile, there was a marked increase in acquisition activity during the year, with the addition of four properties, valued at just under R600-million, and another R380-million in assets currently in the process of being transferred.
“2014 has been a cornerstone year for the fund in terms of creating a solid platform and skill base with which to grow. Management is confident that this next reporting period will be an exciting phase for the fund and our shareholders will enjoy above-market earnings growth coupled with solid capital appreciation,” Kane concluded.