Capital happy with its results in a tough market

Posted On Friday, 29 January 2010 02:00 Published by eProp Commercial Property News
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Capital Property Fund’s focus on selling poorer quality properties at the top of the property cycle and acquiring properties in prime nodes with corporate tenants is paying dividends.

Keillen NdlovuListed property unit trust Capital Property Fund’s focus on selling poorer quality properties at the top of the property cycle and acquiring properties in prime nodes with corporate tenants is paying dividends.

The total distribution for the year at the group, which focused on acquiring properties with sound property fundamentals, rose 14,4% to 54,58c a unit.

Capital said yesterday the properties had performed well in a market with higher vacancies.

Stanlib listed property analyst Keillen Ndlovu said the company had achieved “very strong” results in a recession. “This will be one of the highest distribution growths to be delivered this season.

“It is an outcome of a management strategy that looked beyond the economic boom. Management has built one of the most defensive property portfolios in the sector. Even this year’s distribution growth outlook of 9% 11% reflects that,” Ndlovu said.

Demand for industrial and commercial space was subdued with portfolio vacancies rising from 2,7% in December 2008 to 4,4% last month.

Conservative gearing at the top of the property cycle let the fund take advantage of the discount in the listed property sector in the past 18 months. Capital acquired 43169000 units in Pangbourne Properties at an average R13,85 for the long term.

Capital had reduced its holding in New Europe Property Investments from 6155000 shares to 4362837. The investment was no longer equity accounted, and the intention remained to sell the holding over time.

Meago property analyst Jay Padayatchi said Capital continued to focus on making itself a niche player in the industrial and office sector, making a tie-up with sister company Pangbourne a likely next step.

“With a focused management team, high quality of earnings, a stabilisation in vacancies and an improvement in overall gross domestic product growth, the forecast 25% of expiring leases in December this year is likely to prove more of an opportunity for Capital rather than a threat,” said Padayatchi.

Last modified on Monday, 28 April 2014 18:18

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