Rebosis interim results for the six months ended 28 February 2018

Posted On Tuesday, 08 May 2018 21:46 Published by
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Rebosis Property Fund, the JSE’s first listed black-managed REIT, sustained solid distribution growth for the half-year ended 28 February 2018. 

Sisa-Ngebulana

The results were underpinned by a diverse portfolio of dominant retail assets and stable earnings growth through its commercial office portfolio, mainly let to government. In addition, Rebosis benefited from the full year consolidation of Ascension Properties, increasing distributable income by 29.6% from R389.1 million in the comparative prior year period to R504.2 million.

The Fund declared a total interim distribution of 63.23 cents per ordinary share, up 4% on the comparative half-year distribution per ordinary share.

Founder and Executive Deputy Chairman, Sisa Ngebulana commented:

“The solid distribution growth despite continued macro-economic headwinds speaks to the quality of our portfolio. Both the retail and office portfolio have delivered a 6.8% net property income growth in the reporting period with positive rent uplift on renewals that indicate good property fundamentals.“Trading densities at our Eastern Cape malls have outperformed our Gauteng centres and the overall retail portfolio trading density is above the IPD growth average for regional malls for the same period.” 

At the close of the reporting period, Rebosis’ underlying portfolio was valued at R18.9 billion and consisted of six retail assets contributing 40% of net income, 42 commercial offices contributing 59% of net income and an industrial asset, contributing the remaining 1% of net income.

The like-for-like growth in the underlying retail portfolio amounted to 7.1% year-on-year, 5.5% for the commercial portfolio and 7,0% for the industrial asset.Borrowings increased R10.3 billion from R9.8 billion in the prior reporting period resulting from additional shares acquired in New Frontier Properties Limited (“ NFP”) and the funding of the Dublin acquisition by NFP.

The weighted average cost of debt decreased marginally from 9.4% to 9.3%, largely due to the decrease in the JIBAR reference rate. There are currently hedge arrangements in place for 67.1% of the debt. The loan to value increased from 45.7% to 48.3% as a result of the increased borrowings.Going forward, the Group indicated that it will accelerate its focus on filling up the vacancies and capital recycling:

“We will focus strongly on filling the remaining vacancies at Forest Hill and Baywest, our newly acquired malls. “At the same time, we will accelerate the disposal of our non-core office assets, with the proceeds used to reduce debt levels in the Fund. Our ultimate aim is to reduce the loan to value to below 35%.

“Reducing the non-core office portfolio will also result in a more retail biased fund, in line with our strategy of being retail dominant,” added Ngebulana.Rebosis expects distribution growth per ordinary share for the 2018 financial year of between 4% and 6% above that of 2017, based on the current economic environment. 

Last modified on Tuesday, 08 May 2018 22:04
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