By Nick Wilson
Listed property company Orion Real Estate, formerly Alpina Investment Holdings, on Wednesday reported R3,9m profit for the six months to December, compared to a loss of R1,1m in the same period the previous year.
MD Franz Gmeiner said the profit reflected the "first part of the restructuring of the old Alpina company which involved disposing of noncore properties and reducing company overheads by closing the head office".
The Orion Group, which has the Orion Hotels unit, took over the struggling Alpina in March last year and is in the process of restructuring the company under the Orion Real Estate banner.
Gmeiner said that two properties were bought that also added to the profitability of the company, namely the Promenade shopping centre, office and hotel complex in Nelspruit and the Orion Centre in Bedfordview, Johannesburg.
The company unwound a fixed-rate loan structure after October that resulted in significant interest savings. A buoyant property market also helped Orion Real Estate reduce vacancies in its property portfolio.
Orion Real Estate is a small company with market capitalisation of R95m and property assets worth R233m.
Gmeiner said the size of the company would increase as restructuring of the old Alpina was not complete.
He said the bulk of properties owned by the Gmeiner family were in the process of being transferred into Orion Real Estate. "This will add significantly to the bottom line going forward," said Gmeiner.
Once the properties were transferred, market capitalisation would increase to about R280m and assets would be worth about R550m, he said. Management wanted to build Orion Real Estate?s portfolio up to about R1bn as "soon as we can", and although there was a shortage of properties in the marketplace, there were "deals available".
Orion would look for a combination of office, retail, industrial and hotel properties. The Orion Group, through its hotels unit, is experienced in the running of hotel properties. Orion Real Estate reported an 8,8% increase in net asset value a share to 36,69c.
The group has secured the land for a R1bn multipurpose property development in Bethlehem, in Free State, and would "remain the majority shareholder in the venture in return for providing the land and putting the project together".
Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge
