Spearhead Property Holdings' half year results, published today on SENS (Tuesday 21st February) confirm their position amongst the top performing listed real estate companies on the JSE Securities Exchange for the calendar year 2005.

A recent estimate based on total returns to linked unit holders for 2005 put them sixth out of 37 in this sector.  This follows on their number one placing in 2004 and makes them number two in their sector measured over the last five years.

"From the time we listed on the JSE in 1999, it had been our goal to be among the most consistent top end performers not just in the property sector but on the exchange as a whole," said Mike Flax, the company's CEO.  "Thus far we have achieved this and recent planning sessions with our directors and strategists indicate that we should be able to maintain our double digit linked unit distributions through to 2010 and possibly beyond."

On the latest results, Spearhead has increased its linked-unit distributions by 13,7% over the equivalent period last year.  This continues the company's fine track record of compound annual growth in distribution per unit since listing in 1999 of 13% per annum.

Flax attributed the continued distribution growth to the combination of factors, including further savings on finance costs (as a result of increased competition among the financial institutions), effective control of property expenditure, a 30% increase in revenue rentals and, most importantly, the company's aggressive acquisition policy.

Reliance on trading profits, he said, had been significantly reduced (to less than 10% of income) and high quality annuity income streams will in future drive Spearhead's growth.

In the last nine months, said Flax, Spearhead had bought the prestigious foreshore high rise building, Pier Place, with 13 000m2 of offices and a retail component, and Sterling House, in Tyger Valley with 3 500m2 of lettable space.  They have also acquired a number of other  properties.

Properties bought by Spearhead but not yet transferred include the Forum building, also in Tyger Valley, the Berg River Textiles factory in Paarl with 35 000m2 (for conversion into a high security industrial park), Goede Hoop Park in Bellville (occupied by the Department of Water Affairs on a five year lease).  This complements Parc du Bel, already owned by Spearhead with the same tenant.  The company also bought the landmark Bonwit building in Salt River with 16 000m2 for R33 million, an ideal acquisition for upgrading, said Flax.

Flax stressed, as he has done previously, that what sets Spearhead apart from most other loan stock companies, is a willingness to develop on their own account and in partnership with other high profile Cape developers. This year, he said, Spearhead will be involved in R1 billion worth of new developments, making it a very definite frontrunner in Cape development.

The past year's developments had, he said, been particularly successful. During the period under review Spearhead, often working in partnership with other companies, had brought on stream the Wembley Square residential complex in Gardens South and the adjacent Wembley office and retail complex with a Virgin Active Gym.  (Both of these were joint ventures with Faircape.)  They have also completed the upgrading of the Old Oak Retail Centre near Brackenfell, the 8 500m2 Blue Downs Retail Centre in partnership with Cavalier (the first regional shopping complex in the area) and extensions to the Ottery Hypermarket with 3 000m2 of space.

Work, said Flax, is now in full swing on an 11 000m2 extension to the company's Knowledge Park building, one of the landmark buildings at Century City.  This extension is scheduled for completion before the end of the year.  Work is also progressing well on the 25 000m2 Sable Square outlet shopping centre near Century City and the luxury Oasis Retirement Resort (in partnership with Harries Projects) which will probably come to be recognised as the most comprehensively served retirement resort  in the Western Cape. (The first  residential block will be completed  by the end of the year.)

Also now progressing well is the R200 million, still to be named, office building next to the Cape Town International Convention Centre.  Here some 17 000m2 of A-Grade office space will be available from mid-2007.

By the year 2010, said Flax, Spearhead's property portfolio should have grown to have a value of over R3 billion.

A recent and very satisfactory highlight, said Flax, had been the surge in Spearhead's market capitalisation to a level above R1 billion.  This, he said, had lifted Spearhead firmly into the mid-cap league of securities exchange stocks.

Spearhead's share price, added Flax, had responded to the consistent distribution growth and to the widespread rerating of property stocks by growing at a compound rate of 31% since listing.  On the morning of this half year results announcement it had stood at R32.5.

Flax said that with the economic fundamentals in South Africa still in place and unlikely to change, prospects for Spearhead remain good.

"A combination of relatively low interest rates, improved tax collection, rising incomes, low inflation and improved business confidence should smooth the path ahead for a company like Spearhead," he said.  "We can, however, take credit thus far for reading the markets well and for responding ahead of the pack to trends and cycles.  Our focus on a specific area, the Greater Cape Town, has, as always, paid off making us the possibly the leading property company in the area and one now particularly liked for shareholders
and investors."

For further information contact Mike Flax on 021 425 1000 or 083 375 0295.