Acucap final distribution up 6.1%
Business Live - Jun 8th 2012, 08:39
Acucap Properties reported a distribution of 147.32 cents per unit (cpu) for the second half of the year ended 31 March 2012. This represents growth of 6.1% over the same six month period last year.
Together with the interim distribution of 145 cpu, this gives unit holders an annual distribution of 292.32 cpu, a growth rate of 6.05% over the previous financial year.
Over the 10 years since listing in 2002, Acucap’s distributions have grown at a compound average annual rate of 7.6% per annum compared to inflation at an annual rate of 4.6% p.a. over the same period. Thus the company has been able to meet its commitment to inflation equalling growth in cash distributed to its unit holders.
This achievement has been well appreciated by the market place. The total returns on an investment made in Acucap units with dividends reinvested have averaged 22% per annum over the ten years.
Acucap's retail portfolio performed well in the year under review. Reported sale revenue grew by 7.5% in nominal terms for the year to 31 March 2012 compared to the previous year. Net rental growth from the fund's retail assets was marginally lower at 6.9%, with the result that rent to turnover ratios remain within comfortable ranges across all retail segments, a positive indicator of the sustainability of rental growth.
Leases for 79,720m2 expired during the year, and excluding the effects of the Checkers Hyper renewal at Festival Mall, renewal rentals were 10.7% higher than expiring rentals. There was a high tenant retention ratio of 90%. Vacancy rates remained low across Acucap's retail portfolio, ending the year at 2.6% (2011:2.9%).
In Acucap's high quality office portfolio, vacancies also remained low, ending the year at 3.3% (2011: 3.5%). Leases totalling 30,360mSquared expired during the year at an average rental of R133.96/ mSquared, and were renewed at an average of R121.05/ mSquared. Although this is a negative reversion of 9.6%, it is better than the negative 13.3% forecast in Acucap's March 2011 results.
The achieved net rental rate per square metre of R121.05 is 13.1%
higher than the average rate of R107.01 achieved for office leases entered into in the 2011 financial year, and seen together with slightly lower
vacancies and better than expected reversions, this indicates an improvement in the `A' Grade office market.
The last development profits from Helderberg Village were realised in the six months to 30 September 2011 and there will be no further profits from this source.
Bad debts written off of R1.27m remained fairly constant compared to the
R1.25m written off in the prior year. The downward trend in the provision for impairment of tenant receivables continued, decreasing to R2.9m from R3.7m at 31 March 2011 and R4.6m at 31 March 2010.
Acucap said its property portfolio remained well-positioned to continue delivering real growth in distributions, although South Africa's economic recovery remained fragile.
“Under these circumstances, and with the last development profits still in the 2012 income base, the board expects distributions for 2013 to increase by 4% to 6%. Once the effects of development profits are out of Acucap's income base, growth in distributions can be expected to move into the 6% to 8% range, in line with the potential of Acucap's high quality property portfolio,” the company said.
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