Metboard’s distribution up again

Posted On Thursday, 02 June 2005 02:00 Published by eProp Commercial Property News
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Metboard announced a total distribution of 40,17 cents per link unit

Estienne De KlerkMetboard Properties Limited (“Metboard”), South Africa’s largest industrial property company listed on the JSE Securities Exchange South Africa (“JSE”) with industrial property assets of R1,85 billion, today announced a total distribution of 40,17 cents per link unit for the year to 31 March 2005.

This represents an increase of 3% from the prior year, while Metboard’s final distribution increased by 3,2% to 21,67 cents per linked unit for the six-month period to 31 March 2005 from the comparable period ended March 2004.

Total distributable earnings payable to linked unitholders increased by 26,7% to R111 million.

“The overall improvement in the industrial property sector’s rental levels is expected to continue and Metboard’s distributions for the coming year should exceed those of the year ending 31 March 2005,” said Executive Director and fund manager of Metboard, Estienne de Klerk.

Metboard’s net asset value per linked unit increased by 10,2% to 358 cents at 31 March 2005, from 325 cents the prior year. Ignoring the fair value adjustment on the fixed interest bearing debt the net asset value is 371 cents.

During the year under review Metboard’s revenue increased by 22,6% and trading income by 21,4%, resulting mainly from the acquisition of 28 properties during the period and a significant reduction in vacancies from 5,0% to 2,4%.

A marked improvement in the tradeability and liquidity of Metboard units was attained during the year under review with a total of 125,9 million units traded on the JSE. This equates to 48,4% of the weighted linked units in issue and represents a 224,4% increase on the 56,1 million units traded on the JSE in the previous year.

“Metboard’s linked unit price also achieved a record high of 410 cents per linked unit on 22 February 2005, which improved to 425 cents per linked unit subsequent to the year under review, on 29 April 2005, as the linked unit moved closer to the ex-distribution date,” explained de Klerk.

The listed property fund’s borrowings, at 31 March 2005, nominally represented 39.6% of the value of the property portfolio. The total borrowings amounted to R768 million with a nominal value of R732,7 million and a fair value adjustment of R35,3m. Metboard fixed 83,5% of its interest rates for periods from one to seven years. The weighted average cost of finance equates to 11,87%.

“Metboard has successfully negotiated the reduction in the bankers’ lending margins from 2,25% to 2% on a substantial portion of its borrowings, effective from 1 March 2005. Furthermore, we are currently investigating alternative ways of reducing the cost of debt by accessing new securitisation structures currently available in the market,”
de Klerk indicated.

Metboard revalued its 176 investment properties upwards by R149,5 million to R1,85 billion, equating to an increase in value of 8,8%.

During the year under review Metboard acquired 28 properties for a total consideration of R295 million, 17 from subsidiaries of the Lyons Corporate Lease Fund Limited and 8 from African Tubes and Pipes.

In line with its policy of disposing of under-performing properties Metboard sold 17 properties for a net consideration of R50,5 million, at a loss of R1,5 million, for the year ended 31 March 2005.

“The optimisation of Metboard’s portfolio is continuing with a further 14 agreements of sale concluded for an aggregate consideration of  R59,5 million in respect of under-performing properties. Agreements have also been concluded to purchase two additional buildings with an aggregate purchase consideration of R23,3 million,” said de Klerk.

Metboard’s lease renewal rate during the year under review was 81,71% compared to 66,06% for the corresponding period in 2004. Likewise new lettings exceeded those of the prior year by 64,3%.

“The cumulative result of disposals, acquisitions, new leases and renewals concluded has decreased vacancies by 30,611m? to 2,4% or 35 304 m? of the 1,476,184m? gross lettable area in Metboard’s portfolio. This clearly reflects the improvement in the letting conditions in the industrial sector and efficient management of the property portfolio,” explained de Klerk.

At 31 March 2005 Metboard’s portfolio, by value, consisted of 42% warehousing, 22% industrial parks and mini units, 15% light industrial, 14% manufacturing and 7% retail/motor warehouses.

The listed property fund’s geographical spread is represented by 23% of its portfolio, by value, in Greater Johannesburg, 44% in the remainder of Gauteng, 20% in the Western Cape, 11% in KwaZulu-Natal and 2% in other areas.

Metboard’s final distribution of 21,67 cents per linked unit will be paid to unitholders on Monday, 27 June 2005.

Metboard is managed by Investec Property Group.

 

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