Nick Wilson
Property Correspondent

INDUSTRIAL-focused property loan company Pangbourne Properties reported yesterday that its distributions for the six months to December had increased 5,6% to 47c a combined unit.

Although a number of its peers in the listed property sector, particularly those with large retail property exposures, have been reporting double-digit distribution growth, Pangbourne said the growth was in line with its promise to deliver distributions above inflation. It said industrial property portfolios always showed “measured growth”.

“There is slow, steady long- term growth in the industrial market as opposed to the huge increases we’ve been seeing in retail property,” said Pangbourne.

The company said the acquisition of the R1,4bn Transnet Retired Funds Property Trust portfolio would go a long way towards improving the overall quality of its portfolio.

“As a result of the Transnet transaction, the average of the properties has been reduced and we expect the improvement to come through as income from the new portfolio comes into Pangbourne,” the group said.

The acquisition, which includes 48 properties and is still subject to the approval of the Competition Commission and Pangbourne unit holders, is Pangbourne’s largest transaction since its inception in 1987.

The properties comprise 440000m² of gross lettable area.

Pangbourne said the increase in distributions and an increase in share price from R10,30 in June to R12,60 in December had given investors a total return of 27% for the six months.

“While this is a short-term return, Pangbourne’s assets are of a long-term nature and our strategy is to create a solid asset base from which to produce sustainable earnings into the future at a rate exceeding inflation,” said CEO Craig Hutchison.

Occupancy in Pangbourne’s property portfolio reduced slightly from 95,75% in June to 94,86% in December.

“For the Pangbourne portfolio, this is considered fully let. Its historically short lease profile has protected it against negative market reversions and enabled the company to take advantage of the high demand for industrial space,” said Pangbourne.

The company said its goal was to make a final distribution for the financial year that would “reflect an increase of no less than the interim distribution”.

During the period, Pangbourne concluded an empowerment deal with Yard Capital which saw Yard acquiring 6,15% of Pangbourne’s combined units.