Sycom Property Fund distribution up 5%

Posted On Thursday, 17 November 2011 02:00 Published by Commercial Property News
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Sycom Property Fund Managers Limited has reported a distribution of 81.05c per unit (cpu) for the 6 months ended 30 September 2011, an increase of 5% over the same period last year.

Sycom Property Fund Managers Limited on Thursday reported a distribution of 81.05 cents per unit (cpu) for the six months ended 30 September 2011, an increase of 5% over the comparative period last year.

Headline earnings per unit amounted to 96.33 cents versus 51.09 cents previously.

There was a pleasing turn-around in Sycom's office portfolio, as vacancies reduced much more quickly than had been expected, from 11.7% at 31 March 2011 to the current level of 7.1%.

This represents a net reversal in vacancies of 7,174m2.

Much of this letting took place towards the end of the six month period under review, and as a result, the effects of the vacancy take-up will only start to come through in the second half of the 2012 financial year and into the following year, as the new signings take occupation over the coming months.

Also pleasing, the fund said, was the increase in the retention ratio to 95% for leases that expired over the six months ended 30 September.

In the previous year, 90% of expiries were retained, and in the year to March 2010, only 60% of expiring leases were renewed.

The high retention levels and the strong letting activity both underline the quality of Sycom's office portfolio, which has performed substantially better than the office sector as a whole based on reported statistics from SAPOA.

Against the background of this positive leasing activity, net rentals declined from R131.82/m2 on expiry to R124.41/m2 on average across the 54,479m2 of agreements concluded in the six months to 30 September 2011.

In the next six months, leases for 10,466m2 will expire at an average net rental of R138.41/m2, and these are expected to be renewed at R134/m2, representing a 3.2% negative reversion.

Sycom's South African retail portfolio generated turnover growth of 5.9% for the six months to 30 September 2011.

Paarl Mall was the top performer, with turnover growth of 8.05%, and Vaal Mall continued to deliver good results, with turnover growth of 7.87%.

Somerset Mall, Sycom's most mature retail asset, showed a particularly pleasing result with turnover growth of 6.43%.

Only N1 City disappointed somewhat with growth of 2.66%, although off a high base for May and June last year, when the mall's turnover surged during the soccer world cup.

"This world cup effect was significantly greater at N1 City Mall than at any of Sycom's other retail centres," Sycom said.

Overall, it added, the picture emerging from the analysis of these ratios is that tenant turnovers were growing comfortably in line with rentals, and that rental affordability is therefore not under any threat.

During the period under review, leases totalling 32,860m2 terminated at an average rental of R147.29/m2.

Leases totalling 32,487m2 were concluded at an average rental of R153.91/m2. The retail vacancy remained fairly constant in the period at approximately 1.9%.

Expiries in the remaining six months of the 2012 financial year will amount to 10,996m2, terminating at an average rental of R171.79/m2. These leases are expected to be renewed at an average rate of R183.30/m2.

Source: I-Net Bridge

Publisher: I-Net Bridge
Source: I-Net Bridge

Last modified on Friday, 14 June 2013 22:34

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