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Premium H1 distr dn 4.9% to 55.8c/linked unit

Posted On Friday, 21 October 2011 02:00 Published by
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Premium Properties has reported a 4.9% decline in its interim distributions, as tenants' total cost of occupation increased due to high utility costs and assessment rates.

Property-Housing-ResidentialThe property fund's distributions dropped 4.9% to 55.8 cents per linked unit in the six months to August, compared with the previous corresponding period. Revenue was up to R251.1 million from R218.8 million.

"Whilst our commercial leases do provide for the recovery of the cost of utilities and rates and taxes, these increased costs impact negatively on new rentals on expiry of leases. Our residential leases do not provide for the recovery of rates and taxes," the company said in a statement.

Rental income and net rental income increased by 14.3% and 9.0% respectively, compared with a year earlier.

The residential portfolio, which represents 29.5% of the portfolio by rental income, achieved growth of 6.2%, underpinned by low vacancies and strong demand for affordable accommodation.

Property expenses increased to 43.1%, with a significant increase in repairs and maintenance, assessment rates and utilities expenses.

Looking ahead, the company said Premium would continue to focus on the upgrading of properties and this should provide investors with improved distributions in the medium to longer term.

"It is anticipated that the growth in the economy will remain subdued in the short term. Notwithstanding this environment, and barring unforeseen events, Premium anticipates that the distributable income for the forthcoming six months should improve," the company said.

Last modified on Wednesday, 23 April 2014 16:14
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