Nick Wilson

Property Correspondent

SAVINGS in debt costs and a strong property performance were among the factors that helped listed property loan stock company Vukile Properties increase its distributions 11,4% to 68,5c for the year to March.

Vukile delivered distribution growth of 14,3% for the six months to March.

CEO Gerhard Van Zyl said an “excellent contribution” from listed property loan stock company MICC Property Income Fund had helped.

Vukile is in the process of taking over MICC Property Income Fund and already owns 98,9%.

Vukile said its net profit before tax, debenture interest and fair value adjustments amounted to R223m for the year to March compared with the R172m for the previous year. This represented an increase of 30%, he said.

MICC contributed R71m to net profit, before tax, debenture interest and fair adjustment, for the year to March.

Vukile said the value of its property portfolio had increased 8,9% to R2,5bn in the year under review. The MICC acquisition brings total assets to R3,5bn.

A challenge for Vukile is its liquidity levels. One of the company’s priorities for the previous year had been to improve the liquidity of its linked units, but Van Zyl conceded that no significant progress had been made.

The more liquid a property fund, the more attractive it is to institutional investors, because it is easier to buy in and out.

Van Zyl said Vukile’s units seemed to be “fairly closely held” by unitholders.

Total trade for the year was R305m worth of units. This meant that 11% of the market capitalisation at year-end was traded during the year.

Future property transactions would be one way, to increase liquidity levels. Van Zyl said normally when a property was acquired, it was paid for partly by debt and partly through raising cash through new units.

Mariette Warner, head of property funds at Stanlib Asset Management, said Vukile had presented a “good set” of results where distribution growth was above the listed property sector average of 10%.

Angelique de Rauville, MD of Investec Listed Property Investments, said Vukile’s results were “in line with our expectations”.

“We were expecting between 12% and 14% earnings growth for the second half of their financial year. So 14,3% exceeded our expectations,” she said.