Capital Property reports earnings slip

Posted On Friday, 06 February 2004 02:00 Published by eProp Commercial Property News
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Listed property fund Capital Property Fund (CPL) has reported a fall in its final headline earnings per unit for the year ended December 31, 2003, to 27.44 cents from 28.24 cents a year earlier.

Property-Housing-ResidentialThe group declared a final cash distribution of 14.59 cents per unit, up from 14.48 cents in 2002, making the total distribution for the year 29.34 cents per unit, 3% higher than the 28.49 cents distributed in 2002.

Unveiling its final results, Capital said its net asset value rose to 235 cents per unit from 225 cents a year earlier, with net property income rising to 66.15 million rand from 52 million rand. Total income including interest was 70.4 million rand, versus 55.2 million rand in 2002.

The weighted average number of units in issue rose during the year to 184.616 million from 146.838 million the previous year.

At year end, Capital's portfolio comprised 57 properties in the major urban areas of South Africa. By value, 51% were offices, 40% industrial properties and 9% retail. Geographically, 61% were located in Gauteng, 26% in the Western Cape and the balance in KwaZulu Natal and Mpumalanga.

The valuation of the portfolio as at December 31, 2003, totaled 425.4 million rand. Together with Capital's cash reserves in the capital account of 10.2 million rand, the group's total market valuation amounted to 236 cents per unit, up from 221 cents per unit as at the end of 2002.

The group said that its sales activity during the year had largely been concentrated on smaller or lower capital value properties located in secondary commercial or industrial nodes, and had resulted in the disposal of eight properties. The bulk of these were either vacant or with large vacancies and negative cash flows.

As a result, the reinvestment of the sales proceeds would be income enhancing. Vacancies had continued to fall, with an average vacancy rate of 6% on average in 2003 compared to 11% in 2002 and 15% in 2001.

Looking ahead, Capital said it expected earnings for 2004 to be similar to those of 2003, due to the effect of its planned acquisitions during the new year and the expiration of a number of substantial leases that were above market levels in its existing portfolio and the possibility of vacancies in these premises until re-lettings occurred. However, it added, the procurement of additional properties and re-orientation of its portfolio should result in an improvement in asset quality for unit holders and a foundation from which earnings would grow.

Last modified on Saturday, 10 May 2014 14:22

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