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Sycom lifts payout growth 8%

Posted On Monday, 20 November 2006 02:00 Published by Commercial Property News
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Listed property unit trust Sycom Property Fund reported on Friday that its distribution growth for the six months to September had increased 8,05% to 59,40c a unit.

Neno HaasbroekThe fund's growth was below the average listed property sector distribution growth, where double-digit earnings growth was recorded in most cases this year.

But Sycom's new management group, Parkdev, which acquired the fund's management company, Sycom Property Fund Managers, from Grapnel with effect from July, said cost-cutting and assessment of individual properties should improve distribution growth in the future.

Neno Haasbroek, new CEO of Sycom, said Parkdev had "achieved significant cost savings in expenses, which will impact positively".

"We will assess every property individually to see where we can add value and improve the income streams," Haasbroek said.

A large development pipeline and the disposal of poor-quality properties in favour of more expensive, better-quality properties contributed to slower distribution growth.

Haasbroek said that, historically, Sycom sold off properties at higher yields and reinvested the proceeds at lower yields.

"Sycom was selling bad-quality and buying good-quality property. If you look at the portfolio over the last five years, there has been a lot of work that has gone into changing the portfolio and this has affected income streams," he said.

The development pipeline Sycom has in place has now also been completed.

"From next year we expect to start improving income distributions. The groundwork for this was due to the replacement of ageing properties with better- quality properties and the development of new properties."

Last modified on Monday, 28 April 2014 12:35

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