Growthpoint Properties (GRT) on Wednesday reported an 8.1% rise in distribution to 131.0 cents per linked unit for the year ended June 2011, compared with the previous corresponding period.
SA's largest listed property fund said distributions were in line with expectations. Net property income rose to 3.6 billion rand from 3.2 billion rand, while operating profit rose to 3.4 billion rand from 3.1 billion rand previously.
The fund said the recovery from the recession was proving to be sluggish, with slow economic growth, an uncertain and volatile global outlook and increases in energy and transport costs that were well above inflation.
The company said the increase in revenue (12.1%) was mainly due to contractual rental escalations, accounting for the acquisition of Growthpoint Properties Australia (GOZ) made in August 2009 for a full year, higher revenue of GOZ due to acquisitions made and the inclusion of revenue of 25 million rand from the V&A.
The ratio of property expenses to revenue has improved slightly, from 23.1% to 22.8%.
Growthpoint's vacancy levels excluding V&A as a percentage of gross lettable area were 5.0% as at June from 6.4% previously.
"Despite relatively high office vacancies nationally, Growthpoint will be aggressively marketing its available space and expects vacancies to decline in the year ahead," the fund said.
Regional shopping centres and other high quality smaller centres such as Constantia Village and Walmer Park, which collectively account for 73% of the value of the retail portfolio, proved their resilience throughout the recession, it said.
Demand from national tenants for space in these dominant centres remained strong. The current high occupancy rates were expected to be maintained in the year ahead.
The improvement in occupancy levels in the industrial sector was partly due to letting some large areas and partly due to the sale of two vacant buildings. Conditions were expected to remain tough in the industrial sector where Growthpoint had a large number of smaller businesses who were facing a weak economy and increasing cost pressures.
Looking ahead, the company said given the global and local economic uncertainties, higher interest margins on debt refinance, continuing cost pressures and lackluster demand in particular in the office sector, it expected to show positive growth in distributions of between 3.0% and 7.0% for in the next financial year.
