Slim pickings for Capital this year.

Posted On Wednesday, 12 February 2003 10:01 Published by eProp Commercial Property News
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Listed property unit trust Capital Property Fund can expect a modest increase in earnings this year, says asset management company Property Fund Managers.

Property-Housing-Residential

Capital reported a dismal financial showing in the year ended December when headline earnings declined 8,4% from 30,8c a share to 28,3c, and turnover dropped from R55,6m to R51,9m.

The group suffered a net writedown of R46m in its investment property. This translated into a slip in net asset value a share from 253c to 221c.

Property Fund Managers' director, Charles Ryan said the expected improvement should counter the adverse trend experienced last year.

Property Fund Managers provides asset management services to Capital Property Fund.

Ryan said Capital was in a process of overhauling its property portfolio, which consisted of 63 investment properties valued at about R300m.

The portfolio has a 51% exposure to offices, 46% to industrial properties and the balance being retail.

Capital has put on sale a number of buildings considered noncore, and a group of other buildings has been earmarked for disposal.

The group was mainly trying to get out of small and nonperforming industrial properties.

Capital is also looking at acquisitions. It has made a R68m offer for two properties, 2 Long Street, an office block in Cape Town and Southway Mall, a retail centre in Durban, to Cenprop, its sister company.

Cenprop has placed all its assets on sale after it decided to wind up its operations. The Cenprop acquisition is to be settled through the issue of new capital units.

Ryan has said the group was putting in place a loan facility to further grow its property portfolio through acquisitions.

It was taking advantage of regulatory changes which would allow property unit trusts to gear their portfolios up to 30%.

Property unit trusts had been prohibited before from gearing.

'In addition to rejuvenating the portfolio through disposals and acquisitions to achieve a better balanced sectorial spread, options to enhance the risk profile earnings and liquidity are being explored,' said Ryan.

Capital's unit price closed unchanged at 190c on the JSE Securities Exchange SA yesterday.

Last modified on Friday, 09 May 2014 13:56

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