Octodec gets a fillip from a low interest rate environment and proactive letting.

Posted On Wednesday, 20 October 2004 02:00 Published by eProp Commercial Property News
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The low interest rate environment, a proactive letting approach and the containment of costs led to Octodec Investments, the listed property loan stock company, reporting sustained growth in the year to August.

Property-Housing-ResidentialPretoria - The low interest rate environment, a proactive letting approach and the containment of costs led to Octodec Investments, the listed property loan stock company, reporting sustained growth in the year to August.

Its portfolio includes Woodmead Value Mart, Killarney Mall, Elardus Park and Waverley Plaza.

Total distribution for the year increased by more than 26 percent to 60c a linked unit, while headline earnings improved by more than 25 percent to 60.8c a share from 48.4c in the previous year.

Turnover rose by 6.1 percent to R112.4 million and net rental income by 4.8 percent to R75.5 million.

Jeffrey Wapnick, Octodec's managing director, said the favourable climate of reduced interest rates, management's proactive approach to letting and a containment of operating costs resulted in the company's exceptional growth in earnings and distributions.

The value of Octodec's property portfolio increased 10.8 percent to R749.2 million on values prior to revaluation at end-August.

But this value was expected to increase further as Octodec was seeking quality stock to expand its portfolio, which was located exclusively in Gauteng, Wapnick said.

Octodec's property portfolio vacancy factor remained stable at about 7 percent compared with 8 percent last year of total potential rental income.

Woodmead Value Mart, Killarney Mall, Elardus Park and Waverley Plaza continued to enjoy strong growth in consumer spending and demand.

The management of Octodec's property portfolio remained focused on increasing the quality of properties through a programme of upgrading.

During the reporting period, R18.4 million was spent on renovations to properties, including Killarney Mall and Elardus Park, Wapnick said.

He added that the Killarney Mall shopping centre would undergo a major refurbishment at a cost of about R77 million.

Octodec's stock closed up 15c at R5.50 yesterday. The real estate sector improved 0.49 percent.

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