Octodec Investments Limited announced a total distribution to linked unitholders for the year to 31 August 2005 of 67,7 cents per linked unit, an increase of 12,8% on the previous year.

This property loan stock has continued to produce sustained growth in earnings to its linked unitholders, with a final distribution of 36,1 cents per linked unit to be paid on Monday, 21 November 2005.

“During the year Octodec increased the value of its investment properties to in excess of R1 billion, its net asset value per linked unit increased by 58% to 825 cents per linked unit and gearing totalled a conservative 34% allowing for further expansion,” said Jeffrey Wapnick, managing director of Octodec Investments Limited.

“The benefit of the stable interest rate environment, Octodec’s pro-active approach to letting and unlocking the value of its assets through an ongoing programme of redevelopment and upgrading resulted in growth in both earnings and distributions,” stated Wapnick.

Octodec’s rental income and net rental income increased by 9,0% and 5,7% respectively, compared to the previous year. The fund’s retail portfolio, which comprises investments in five prominent shopping centres, Killarney Mall, Woodmead Value Mart, Elardus Park, Waverley Plaza and Gezina Stad, accounts for 64% of its property income and continues to enjoy strong growth in rental income.

Income from Octodec’s investment in Premium Properties Limited and associated company IPS increased. Octodec increased its holding in Premium Properties Limited to 6,2% of the total units in issue. Unrealised gains from fair value adjustments, after providing for deferred taxation, amounted to R17,4 million.

“Over the year extensive work was undertaken to enhance the quality of Octodec’s property portfolio through strategic acquisition and disposal, as well as development,” explained Wapnick.

Octodec acquired four properties in the Johannesburg CBD with a combined value of R21,6 million. It disposed of three properties, with a combined value of R3,5 million, which no longer contribute to its long-term strategy.

Octodec’s R90 million redevelopment of Killarney Mall is due for completion in early November 2005. The centre has been extended by 5,500m2 of retail space, of which 4,300m2 is occupied by Edgars on a 10-year lease and 430 additional parking bays have been accommodated. The yield on the capital outlay is in excess of 11%.

Construction of 6,846m2 of Anke Properties, industrial premises, situated in Silvertondale Ext 1, was completed in August 2005 and leases over 62% of the gross lettable area have already been concluded. The cost amounted to R14 million with an initial yield in excess of 11%.

Work was also completed on the R3 million refurbishment of Gezina Stad Shopping Centre which is now fully let.

The vacancy factor in Octodec’s portfolio is 13,3%, excluding the recently acquired Johannesburg CBD properties which have been mothballed until redevelopment plans are finalised.

“Octodec valued its property portfolio applying market related capitalisation rates resulted in a significant increase in value of R284,5 million, or 32%, which can be attributed to long-term interest rates declining subsequent to the previous valuation,” explained Wapnick.

At 31 August 2005 Octodec’s borrowings amounted to R425,5 million, or 34% debt-to-asset ratio. Interest rates have been fixed on 36% of its borrowings for periods ranging from November 2006 to November 2007. Subsequent to the close of its financial year Octodec fixed a further R150 million of borrowings for a period of three years at a rate of 9,77%, bringing fixed loans to 72% of borrowings.

Resulting from the reduction in the South African Reserve Bank’s repo rate and the re-fixing of borrowings at significantly reduced interest rates, the weighted average rate of Octodec’s borrowings decreased from 12,4% as at 31 August 2004, to a current 10,3%.

“A positive outlook for the SA economy as well as a stable interest rate environment and the benefits of the refurbished Killarney Mall will enable Octodec to continue to deliver good growth in distributions per linked unit,” said Wapnick.

~ Ends ~

Issued on behalf of:       Octodec Investements Limited
                                   Jeffrey Wapnick
                                   Tel. 012 319 8709
                                   Cell  082 900 1172

By:                              Marketing Concepts
                                   Sandy Davey
                                   Tel. 011 880 2213
                                   Cell 083 453 6668