JSE-listed retail-focused real estate investment trust (Reit) Resilient has declared a dividend of 234.05c apiece for the six months ended June 30, an increase of 3.5% compared with the dividend of 226.11c apiece declared for the six months to June 30, 2021.

Resilient distributed about 170.6-million Lighthouse shares to its shareholders in May.

As such, no dividends from these shares were included in distributable earnings for the interim period under review. Had Resilient retained these shares, the interim dividend would have been 10.2% higher than the comparable dividend, the company points out.

Meanwhile, Resilient’s loan-to-value ratio for the period was 32.1%. Total revenue was about R1.5-million.

It notes that the Covid-19 pandemic no longer has a significant impact on the group's shopping centres and no further discounts were provided to leisure-focused tenants.

New rental agreements (base rental plus a turnover clause) have been agreed with Ster Kinekor and a similar arrangement has been proposed to NuMetro.

Following the release of a number of blockbuster films, Resilient says the performance of the cinemas has been “encouraging”.

The company says it also continues to engage with State-owned South African Special Risk Insurance Association (Sasria).

The only outstanding insurance claim for damages and expenses suffered during the riots of July 2021 amounts to about R1.3-million. This amount was not accrued for in this interim period.

Resilient acclaims that its portfolio achieved strong comparable sales growth of 9.9% for the period under review.

The company is also continuing to actively address the structural changes in the retail environment, in particular the downsizing of department stores and increasing the grocery offering.

Four additional full-offering grocery stores and a Food Lover’s Market are being introduced.

The South African property portfolio recorded comparable net property income growth of 7.7% for the reporting period, excluding Covid-19 rental discounts granted in the comparable period.

Resilient owns 27 retail centres in South Africa with a gross lettable area of 1.2-million square metres.

Resilient's pro rata share of the vacancy in the portfolio was 2% as at June 30. This includes space held vacant to accommodate the new grocery stores.

SHAREHOLDER ENGAGEMENT

Resilient says its property portfolio appeals to investors seeking predictable and sustainable cash flows from real estate exposure without volatility in capital value.

Reflecting global trends, it notes that it is no longer a given that a JSE listing enhances access to capital, particularly for a property company such as Resilient.

The company is, therefore, with the support of its advisers, evaluating its listing on the JSE and all alternatives, with the objective of maintaining high standards of governance and reporting, but with greater efficiency and focus on investor interests, with a view to reducing volatility for investors.

Resilient plans to soon engage with its shareholders and to take their views into account in its evaluations.

PROSPECTS

Resilient says its properties continue to perform strongly.

It highlights considerable progress in addressing the structural challenges of department stores.

The introduction of additional grocers is expected to increase the footprint of the group’s properties. These initiatives are yield-dilutionary, however, are partially offset by increased solar capacity which is yield-accretive, the Reit points out.

The board intends to resume providing distribution guidance in 2023.