Nick Wilson

SA Retail Properties yesterday reported a 1,4% increase in distributions for the six months to September — the lowest growth in distributions reported in the listed property sector so far this year.

The retail property-focused company’s poor performance can be attributed to the costs that were incurred in its efforts to fight off listed property loan stock company Hyprop Investments’ takeover bid.

Hyprop, which unveiled a hostile takeover bid for SA Retail at the end of March, secured a 44,4% interest in SA Retail in September after a protracted battle with Marriott, the managers of SA Retail.

SA Retail said it had incurred R3,3m in costs "as a result of the Hyprop offer".

The company said the costs had been "expensed in the period under review" and that this had resulted in a 4,5% dilution of distribution growth.

But Catalyst Securities, which issues regular reports on the listed property sector, said SA Retail’s results were "poor" and that even if these costs had not been incurred, a 5,9% growth in distributions would still have been low compared with what the rest of the sector was delivering.

In general, retail-focused property companies on the JSE have delivered strong growth in distributions due to consumer confidence.

Mariette Warner, head of property funds at Stanlib Asset Management, said she was expecting a property sector average of 8% growth in distributions for the next 12 months. Warner said SA Retail’s performance was hurt by the "very high" costs involved in defending the Hyprop takeover bid.