Contractual rental income for the period under review was R1.3 billion compared with R1.1 billion a year earlier. Net operating income came in at R1.2 billion compared with R1.1 billion a year earlier.
Redefine is the second-largest SA property loan stock company by market capitalisation on the JSE, with a diverse range of property assets under management exceeding R29 billion.
On a geographic basis, SA generated 93% of distributable income. Contractual rental income comprised 86% of total revenue, income from listed securities 9% and trading and fee income 5%. Operating costs represented 22.8% of contractual rental income from 21.5% as at August 31 2010.
The company said the bulk of the cost creep related to the once-off duplication of property management costs that arose from the internalisation of property management. Redefine Property International, along with Redefine International Fund Managers Limited, the fund manager of Redefine Property International, contributed 2.3 cents per linked unit to the distribution for the half-year.
During the period under review, leases totalling 246,412 square metres were renewed at an average rental increase of 4.6%. A further 139,059 square metres was let across the portfolio and, together with vacancies from properties disposed of, the total vacancy levels reduced to 8.5% from 10.4% as at August 2010.
Arrears amounted to R34.3 million from R39.7 million as at August 31 2010.
Looking ahead, Redefine said moderate growth was expected from the core property portfolio.
"Fee and trading income are largely unpredictable and difficult to forecast, however the transaction fee of 3.8 cents per linked unit from the Hyprop Attfund transaction is anticipated to be received in the second half of the 2011 financial year. Based on this, the company is anticipating a modest increase in distributions for the year ending August 31," the fund said.