Arnold knocked by higher tenant failures, stiff trading.

Posted On Friday, 07 March 2003 10:01 Published by eProp Commercial Property News
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Cape Town - Property loan stock company Arnold Property Fund had posted half-year results that showed a 24 percent slide in distribution per linked unit to 11c, mainly because of tough trading conditions and higher tenant failures, it said yesterday.

Property-Housing-ResidentialRevenue for the period rose to R76.3 million from R49.5 million but cash and cash equivalents took a dip of about R3.3 million to R11 million.

The directors said general market conditions remained extremely tough, both in the oversupplied office market as well as across the balance of the property portfolio, and interest rates were still high.

"These factors, coupled with higher tenant failures and shrinking tenant requirements, have led to higher vacancies and lower rentals on lease renewals," the directors said.

In addition, the costs of filling vacancies and renewing existing leases were high.

During the six months the property loan company embarked on acquisitions worth R96.2 million, funded partly by additional borrowings and through the issue of linked units. These new acquisitions had boosted the value of the property portfolio to R932.6 million.

The board expected conditions in the property sector to remain tough for the rest of the financial year. Improved economic conditions would probably only be felt from the beginning of next year.

The company was considering the disposal of underperforming properties with the aim of propping up earnings.

However, the directors cautioned that earnings for the second six months of the financial year would continue to be under pressure.

The counter traded unchanged at R1.60 per linked unit yesterday.

Last modified on Tuesday, 06 May 2014 13:31

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