Arrowhead Properties’ distribution grows 13.6%

Posted On Thursday, 09 May 2013 07:10 Published by Commercial Property News
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Arrowhead Properties reports a 13.6% distribution growth for the quarter ended March to 28.04c per combined A and B unit.
Chief operating officer Mark Kaplan attributed the results to a model designed to outperform the market in terms of income growth per unit. “The results reflect a well-executed strategy based on strong letting activities and only purchasing yield enhancing acquisitions‚” he said.
 
Arrowhead owns a diversified property portfolio valued in excess of R2.8bn‚ which is a 100% increase on the size of the portfolio since listing in December 2011.
 
Vacancy levels decreased for the six months from 12.67% to 9.8%‚ partially because of a reduction in vacancies in the initially acquired portfolio and new acquisitions which were well let. Arrowhead transferred seven properties valued at over R525m at an average net yield of 11%. The acquisitions are spread across the three sectors R331m office‚ R65m industrial and R129m retail.
 
Arrowhead’s gearing ratio is 21% compared to 42% at financial year end in September last year. The average interest rate over the six month period was 8.28%. “We intend to increase our long term gearing levels to between 35% and 40%‚” Kaplan said. He said the pipeline was looking healthy and growing.
 
Management was confident that a further R300m worth of property acquisitions would be transferred before financial year end with an average net yield of about 11%. There was also a further R300m of potential properties under due diligence at a similar yield.
 
The Arrowhead A unit price increased from R6.50 at September 30 last year to R7.72 at March 31‚ which together with the distribution of 30c equates to a total return of 23% for six months. Its B unit price increased from R5.85 at end September to R7.60 at end March‚ which together with the distribution of 25.14c equates to a total return of 35% for six months.
 
Arrowhead said it was confident it would meet its previous guidance of 10% distribution growth for the financial year ended September 30.
Last modified on Saturday, 18 May 2013 18:24

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