JSE-listed real estate investment trust (Reit) Texton Property, which has a portfolio of R5.4-billion of assets in South Africa and the UK, declared an interim dividend of 47.95c a share for the six months ended December 31.
This, the company reported on Monday, was achieved from a solid performance of the core portfolio and is in line with market guidance and the prior year dividend.
In addition, Texton's revenue increased by 1% to R303.2-million, with a net property income of R212.4-million (a year-on-year increase of 2%)
During the interim period, the company renewed facilities with Standard Bank totaling R285-million with tenures of two and three years.
"We are proactively engaging with the banks on rolling existing facilities well in advance of expiry and have engaged with several banks to establish relationships to further diversify the lending portfolio," the company noted.
In addition, Texton is considering the realignment of capital management so that its UK assets are financed with UK debt and South African assets are financed with South African debt. In line with this strategy, the company is in the process of finalizing a £10-million facility with global finance institution HSBC.
In considering the yield at which Texton shares have been trading, combined with the scarcity of good quality, well-priced property opportunities, the company's board opted to buy back Texton shares.
In the period, 933 589 Texton shares were acquired at a weighted average price of R6.40.
Meanwhile, between July and December 2017, Texton successfully concluded 14 new leases amounting to 2 489 m2. In the same period, 32 existing leases were renewed, amounting to 43 154 m2.
"This is pleasing given our focused and proactive approach to tenant retention in a challenging market," the company said.
In addition, the company notes that Texton's lease expiry profile has improved significantly since June 2017 when it was reported that 42% of leases (by revenue) expire in the 2018
financial year.
This figure has reduced to 14.3%, with the weighted average lease expiry 4.1 years.
Texton continues to focus on active asset management to ensure tenant retention and improved efficiencies as well as the filling of its vacancies, the company said on Monday, adding that it continues to explore possibilities to increase exposure to prime industrial assets in South Africa and reduce the office exposure.
"This is because we recognise that, from an acquisition perspective, high-yield assets in
the industrial sector are limited. We have continued the disposal of smaller assets, below the R50-million threshold, which are management intensive."