Premium Properties increases its distribution by 31,6%

Posted On Monday, 18 April 2005 02:00 Published by eProp Commercial Property News
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Premium Properties Limited today announced a total distribution for the year ended 28 February 2005 of 50 cents per linked unit.

Jeffrey WapnickPremium Properties Limited today announced a total distribution for the year ended 28 February 2005 of 50 cents per linked unit. This equates to an increase of 31,6%  on the 38 cents per linked unit distributed for the previous financial year.

Premium declared a dividend 0,14 cents (2004: 0,11 cents) per ordinary share together with interest of  27,36 cents per debenture (2004: 21,79 cents),  for the period 1 September 2004 to 28 February 2005. The distribution will be paid to linked unitholders recorded in the register on Friday, 13 May 2005. 

“Significant reductions in financing costs and continued tight control over expenses contributed to Premium’s exceptional growth in earnings and distribution for the period,” said Jeffrey Wapnick, Managing Director of this listed property fund with substantial investment in property in Pretoria. The half-point reduction in interest rates announced by Reserve Bank Governor Tito Mboweni yesterday further bodes well for Premium and is expected to stimulate growth for this geared fund.

“The property market, and in particular, the Pretoria CBD office, retail and residential sectors have performed well,” explained Wapnick. “Subject to prevailing market conditions and the interest rate environment remaining constant, Premium’s distributable income for the period 1 March 2005 to 31 August 2005 should improve.”

The net asset value per linked unit has increased by 37,4% to 424 cents.

Rental income and net rental income increased by 19,7% and 18% respectively, due to a combination of stronger trading activities, a number of yield enhancing acquisitions and new residential conversions.

Premium’s property portfolio was revalued, resulting in an increase of R134,6 million in the value of the fund’s properties.  Deferred taxation of R21,3 million has been provided on the revaluation surplus at the capital gains tax rate. 

During the period, Premium acquired nine properties, located in the Pretoria and Johannesburg CBD’s and Hatfield, for a total purchase price of R34,9 million. 

“These properties are strategically situated and the purchases will enhance the overall quality of the existing portfolio, and further add to the sustainability of long term income streams,” explained Wapnick.

Premium has actively pursued redevelopment and refurbishment opportunities.  An amount of R18,1 million was spent on the renovation of properties and the conversion of office blocks to residential accommodation.  During the year, Premium successfully completed the residential developments of Leo’s Place and Corner Place. 

“Due to strong demand for residential accommodation, work has already commenced on two new residential developments at a cost of R46,4 million.   Planning is currently well advanced on the redevelopment of a number of properties in Hatfield, which comprise of a residential development and 4000m² of retail space.  These properties are strategically situated close to the University of Pretoria. Consideration is been given to the sale of the residential units” pointed out Wapnick.

Income from an associate company, 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 has had a further positive impact on the results.

Borrowings equate to 37% of the value of the property portfolio. This gearing at 37% allows for further expansion. Interest rates in respect of 69% of borrowings have been fixed at various maturity dates ranging from February 2006 to August 2007, at a weighted average rate of 11,7%.

“Premium has produced sustained growth in earnings and distribution to its linked unitholders during the financial year March 2004 to February 2005, with many new exciting projects and acquisitions already on the cards, earnings and distributable income should continue to grow” said Wapnick.

Last modified on Saturday, 10 May 2014 10:29

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