Real estate investment trust (Reit) Tower Property Fund (TPF) has generated proceeds of R396-million from asset management initiatives in the current financial year, which it will use as part of its total return strategy.
The asset management initiatives included the sale of the Pick n Pay distribution centre, in Pinetown, KwaZulu-Natal, for R96-million and the R300-million investment in TPF International by Reit company Oryx Properties, through a subscription and sale of TPF shares.
Of the proceeds, R120-million was used to partially repay TPF’s euro loan facilities with Standard Bank; R80-million was used to partially repay TPF’s South African loan access facilities; R100-million was used by TPF to acquire the Zagreb Industrial property and R90-million was used to partially repay TPF’s South African loan facilities with Standard Bank.
The balance of R6-million has, to date, been used to repurchase 693 908 TPF shares at an average cost of R6.69 a share.
Operationally, TPF has reduced its total portfolio vacancies from 5% as at May 31, to 4.6%.
TPF also continues to actively market its noncore properties and has gone to market on the proposed residential apartments, which it intends to add to its Old Cape Quarter property.
The residential property market, the company said on Tuesday, is more challenging than it has been for some time owing to macroeconomic conditions in South Africa. However, TPF remains confident of its product at the Old Cape Quarter owing to the unique nature of the De Waterkant precinct, where property selling prices continue to outperform other prominent areas in the Western Cape.
TPF has not provided a distribution guidance for the year ending May 31, 2019, but has rather provided a property net income guidance.
TPF’s property net income guidance remains unchanged at this point in time.