Premium Properties distribution up by 39,8%

Posted On Monday, 25 October 2004 02:00 Published by eProp Commercial Property News
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Pretoria-focused listed property fund, Premium Properties Limited achieved an interim distribution of 22,5 cents per linked unit for the six month period ended 31 August 2004, an increase of 39,8% over the corresponding period for 2003.

Jeffrey Wapnick

Pretoria-focused listed property fund, Premium Properties Limited achieved an interim distribution of 22,5 cents per linked unit for the six month period ended 31 August 2004, an increase of 39,8% over the corresponding period for 2003.

"We are pleased to report that the fund has continued to produce excellent returns to its linked unitholders. Rental income and net rental income increased by 19,5% and 12,3% respectively compared to the prior corresponding period, due to a combination of stronger trading activities, a number of yield enhancing acquisitions and new residential conversions , " said Jeffrey Wapnick, managing director of Premium Properties Limited.

An interim distribution of 0,11 cents (2003: 0,08 cents) per ordinary share together with interest of 22,39 cents (2003 : 16,02 cents) per debenture will be paid to linked unitholders on 15 November 2004.

Headline earnings per linked unit for the six month period ended 31 August 2004 amounted to 22,92 cents as compared to 16,23 cents during the corresponding period in 2003, representing a 41,22% increase.

Turnover increased by 19,5 % and net rental income increased by 12,3 % compared with the first six month period of 2003.

During the period, Premium acquired six properties, strategically located in the Pretoria CBD, for a total purchase price of R17,8 million. It is anticipated that these properties will enhance the overall quality of the existing portfolio and further add to the sustainability of long term income streams.

An amount of R6,2 million was spent on the renovations of properties and the conversion of office blocks to residential accommodation. Due to strong demand for residential accommodation, work has already commenced on two new residential developments at a total cost of R48 million.

As at 31 August 2004, borrowings equate to 42,9% of the value of the Premium Properties portfolio and interest rates in respect of 74% of borrowings at 31 August 2004 have been fixed, at various maturity dates ranging from February 2006 to August 2007.

Significant reductions in financing costs also resulted in the fund’s exceptional growth in earnings and distribution for the period.

Income from IPS, in which Premium holds a 40% interest, increased significantly as a result of greater demand for residential and office space, and a number of acquisitions made at attractive yields. A successful residential sectional-title development was completed and largely sold out as at 31 August 2004. The profits from this venture have had a further positive impact on the results.

IPS recently announced that it has entered into a joint venture with Old Mutual Properties to convert one of Old Mutual Properties’ buildings in the Johannesburg central business district from office space into residential apartments. The redevelopment, to be called Plaza Place, will create 211 residential apartments which will be ready for occupation by early 2006.

Wapnick concludes, "The property market, and in particular, the Pretoria CBD office and residential sectors have performed well and management is of the view that, subject to prevailing market conditions and the interest rate environment remaining constant, Premium is well positioned to yield growing distributions to unitholders."

Last modified on Wednesday, 14 May 2014 11:08

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