Low vacancies help boost Capital's distributions

Posted On Friday, 04 August 2006 02:00 Published by
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A solid performance from an underlying property portfolio, low vacancies and cost controls helped boost Capital Property Fund's distributions
By Nick Wilson

A solid performance from an underlying property portfolio, low vacancies and cost controls helped boost Capital Property Fund's distributions for the six months to June to 18,13c a unit, a 9,75% increase over the same period the previous year.

Capital MD Barry Stuhler said on Thursday that vacancies were "very low, at well below 3%". He also attributed the performance to the continued control of expenses and the "recovery of tenant operating costs".

He said Capital had also renewed leases at higher rentals.

Capital was now embarking on a "development phase". It would start work on a joint-venture industrial development in Midrand in the second half of the year.

"There is a joint venture with Improvon and Acucap to develop a large industrial property in Midrand."

He said the total development was worth R500m.

"It has been very well received by the market. We are going to start work in the second half of the year and we've got written offers from major players for large space," said Stuhler.

Capital also said there had been some changes made to its property deal with Fedbond Participation Mortgage Bonds.

In June, the fund said it had concluded an agreement to acquire R410m worth of properties from Fedbond Participation Mortgage Bonds.

But Stuhler said Capital had decided not to buy all the properties offered to them.

"We did some cherry-picking and we carefully selected a portfolio which was in line with our future strategy - being the acquisition of high- grade industrial property mainly situated in the north of Johannesburg and also the office sector," he said.

Capital will now be acquiring R325,1m worth of properties from Fedbond Participation Mortgage Bonds. The deal will boost Capital's asset base to R1,8bn from R1,5bn.

Stuhler said Capital would in future concentrate on the office and industrial sectors.

"Capital's management skills are in those two areas," he said.

At the end of last year, retail made up 36% of Capital's portfolio in terms of value while industrial and offices made up 33% and 31% respectively.

During the six months to June, Capital also made a number of acquisitions, including shopping centre Capricorn Plaza in Thohoyandou, in the former Venda, for R19m.

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Publisher: I-Net Bridge
Source: I-Net Bridge

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