The management team (comprising Chief Executive Officer Gerald Leissner, Chief Operating Officer Mark Kaplan and Imraan Suleman as Chief Financial Officer) recognises that the company's inclusion of mostly secondary grade properties and locations brings with it additional business risk.

This risk is to be managed by having a growing portfolio, as diversified as possible in terms of number of properties, a spread of tenants (of which, over time, will be rated as A grade), a spread of locations throughout South Africa and a spread of properties over the retail, office and industrial sectors of the property market.

As such acquisition activity is key: Arrowhead is in advanced negotiations with various parties for the acquisition of properties with an aggregate value in excess of R820m at an average forward yield just under 11%.

Details around acquisition activity include the following:

• In line with Arrowhead’s stated intention of increasing its property portfolio, the company has concluded the acquisition of the building known as the Business Centre with effect from 3 April 2012 for a purchase consideration of R28 715 140 at a yield of 10.54%.
• Arrowhead has concluded an agreement to acquire a portfolio of office properties from Growthpoint Properties Limited for an aggregate purchase consideration of R167 648 829 at a yield of 11%. The acquisition is subject to the approval of the Competition Authorities.
• Arrowhead has concluded term sheets or is at an advanced stage of negotiations in respect of acquisitions totalling in aggregate around R660 million at an average yield in excess of 10.7%.

In publishing Arrowhead Properties’ interim results for the six month period ended 31 March 2012, it has declared distributions on the A unit of 15 cents and 9,68 cents on the B units. The distributions of just over R21.6 million are in line with the forecast.

Arrowhead incurred an overall operating loss of R11.7 million (or 13.55c per share) for the period, which is forecast to move into postive territory of around R7 million by September 2012, translating to an anticipated profit of around 53c per A&B shares.

Arrowhead is the only South African listed property fund to pay quarterly distributions.