Capital plans focus on A-grade commercial property

Posted On Thursday, 05 August 2010 02:00 Published by eProp Commercial Property News
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Capital Property Fund has posted a solid set of results for the 6 months to June, plans to become a specialised commercial and industrial fund.

Andrew TeixeiraLISTED property unit trust Capital Property Fund, which yesterday posted a solid set of results for the six months to June, plans to become a specialised commercial and industrial fund, owning only A-grade properties in the four major metropolitan areas of Cape Town, Durban, Johannesburg and Pretoria.

MD Andrew Teixeira said the fund would exit the retail sector and completely focus on the commercial and industrial sector, eyeing well- located A-grade buildings.

The fund yesterday posted a 10,26% increase to 28,36c in distribution to its shareholders for the half year to June, despite the economic slump and the weak property market. Mr Teixeira attributed the solid result performance to the fund’s focus on A-grade commercial properties with corporate tenants preferring well-located areas.

He said the corporate tenants in the fund’s portfolio were not adversely affected by the economic recession and there was also evidence of some corporate firms moving to A-grade commercial space from poor properties.

Mr Teixeira said the fund’s retail properties, which constitute 10% of the portfolio, and the small exposure to the Eastern Cape, would be disposed of over time with the focus on A-grade properties.

The large portion of the fund’s properties is leased by corporate tenants less affected by the recession. Capital’s arrears book had, however, increased marginally but remained “firmly” under control.

Stanlib property analyst Keillen Ndlovu said the fund’s results did not come as a surprise.

“It is a reflection of the quality of the portfolio and the strategy to sell lower-quality properties at the peak of the property market. Management is good. Capital remains one of our favourite stocks,” he said.

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