Martprop lags sector, but expects to improve

Posted On Monday, 28 February 2005 02:00 Published by eProp Commercial Property News
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Listed property unit trust Martprop Property Fund announced interim distributions on Friday that were below the listed property sector average.


Property-Housing-ResidentialBut the fund, which announced a 2% increase in distributions to 12,50c a unit for the six months to January, said its increased exposure to retail properties would influence its bottom line positively in the second half of the year.

The listed property sector’s increase in distributions averaged about 5%.

Martprop MD Roger Perkin said one of the main reasons was that the bulk of Martprop’s income was driven by its industrial property portfolio. In terms of its long-lease structures with fixed escalations in rentals it was not seeing the same kind of "superlative growth" the retail-based property funds were showing.

Industrial-property market conditions were improving, but the bulk of Martprop’s properties did not "automatically get the kicker of improving market conditions. The impact of the improving industrial property market conditions is that we are not seeing drops in rentals to the same extent as previously," he said.

On the positive side, Perkin said the fund had increased its retail exposure to 30% of the property portfolio. "With the full impact of those earnings coming through we are anticipating better growth in distributions in the second half than we’ve shown in the first half."

Colin Young, fund manager of Old Mutual’s South African-listed property funds, said that with more retail properties in its portfolio Martprop should "inherently" have a better platform to grow distributions.

"I am expecting better results in the second half," Young said.

Mariette Warner, fund manager of Stanlib Property Income Fund, said she expected earnings to improve when the strengthening industrial property market fed through to fund’s bottom line.

In the six-month review period Martprop completed the developments of Stellenbosch Square, a community shopping centre anchored by Pick ’n Pay and Woolworths, the first phase of the Pick ’n Pay Centre in Tokai, on the Cape Peninsula, and a distribution centre for the Fuel Group in Centurion in Gauteng.

Among other transactions, the fund also acquired an undivided half share in Musgrave Centre in Durban for R187,5m.

Last modified on Tuesday, 13 May 2014 11:47

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