ApexHi to pay out R247m in dividends.

Posted On Friday, 08 August 2003 02:00 Published by eProp Commercial Property News
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Results exceed expectations.

Gerald Leissner.Large property loan stock company ApexHi Properties yesterday declared a distributable net profit of R247m for the year ended June 30 compared with R175,5m the previous year, delivering a return of 102c for each of its A-linked units, the same as last year.

 According to results released yesterday, its B units came out at 106c each, an increase from last year's 103c.

 ApexHi CEO Gerald Leissner said the results exceeded targets and unit-holders' expectations and were a result of increased distributions in the second, third and fourth quarters.

 ApexHi's linked unit structure is different to other listed property companies in that they are divided into A and B units. A-unit holders are guaranteed a distribution of 1,02c for as long as it takes for the total distribution to reach 2,27c. It sits at 2,08 at present. B-unit holders have a higher risk, but also higher returns in future as all future growth in income until the 2,27c mark goes to them.

 Once the 2,27c mark is reached, 45% of the distribution goes to the A-unit holders and 55% to the Bunit holders.

 However, ApexHi reported that vacancies had increased from 14% to 15%, comprising just more than R20000m².

 "The increase in the vacancy percentage can be attributed mainly to Lear vacating 6684m² in Creation, our industrial building in Brits and Mercantile Registrars vacating 14662m² in 11 Diagonal Street in Johannesburg. The space vacated by Lear is still unlet, while 4523m² of the space vacated by Mercantile Registrars has been let," the company reported.

 Leissner said if a commercial tenant vacated offices in the CBD it was very difficult to find a replacement.

 SCMB Securities' property analyst Len Van Niekerk said the distributions for the A-units were predictable, but the Bunits were slightly higher than what he had expected. "I was looking at 26,5c per unit in the last quarter of the period. They (ApexHi) came out with 27,25c."

 He said ApexHi was a case of "classic high risk, high return and offered one of the best returns an investor could get in the listed property sector.

 Van Niekerk said his biggest concern was that of the 221575m² of space that came up for lease renewal during the period under review, only 131757m² or 60% of the leases were retained, which indicates that a lot of businesses are leaving the central business district (CBD)."The business exodus continues in the CBD. The rentals are under pressure in the decentralised market and it becomes more attractive to move there."

 ApexHi reported that its entire property portfolio had been valued by external registered valuers in June and the valuation of the portfolio at R2,1bn had given rise to a revaluation surplus of R4m.

 The company said it had also entered into agreements for the purchase of 13 properties at a total purchase price of R243m, which would be settled by the issue of 13690631 combined units at an average issue price of R13,26 and cash of R61,6m. The cash portion would be funded out of borrowings.

 Leissner said the company's borrowings would sit at 30,5% of it's net asset value. Agreements had also been reached for the disposal of properties worth R2,4m, the proceeds of which would be used to repay debt.      

Last modified on Saturday, 10 May 2014 17:10

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