Madison Property Fund’s distributions boosted

Posted On Tuesday, 07 August 2007 02:00 Published by Commercial Property News
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Madison Property Fund Managers has again exceeded market expectations with its interim distribution to unitholders of 36 cents per linked unit for the six-months to 30 June 2007

Marc WainerThis distribution represents an increase of 23% against the pro-rated eight month prior period to 31 December 2006 and 10,8% increase on the 32,5 cents per linked unit forecast of 12 February 2007. Since listing on 7 June 2006 at the price of 500 cents per linked unit, Madison has provided total capital and income return to linked unitholders of 94.8%.

Madison, South Africa’s largest listed property asset manager, derives its income predominantly from the asset management of ApexHi Properties Limited, Hyprop Investments Limited and Redefine Income Fund Limited. Madison’s assets under management at the close of the interim period totalled R27,4 billion, representing growth of 42% since listing.

“This robust performance can be attributed to the growth in contractual income arising from the increase in the enterprise values of the funds under management, which benefited from the positive property fundamentals currently exerting force on the market. Non-contractual income was also higher than expected,” says Wolf Cesman, director of Madison.

Contractual income of R74,1 million accounts for 66.8% of Madison’s total income. Development and leasing fees total R23,8 million and other income of R13,1 million, which includes a fee of R10 million earned on the successful acquisition of Spearhead Property Holdings Limited by Redefine Income Fund Limited. Madison’s revenue for the period totals R97,9 million.

“Madison will continue to diversify its sources of property asset management income and has already embarked on several innovative income enhancing initiatives which will come into effect over the next few months,” says Marc Wainer, director of Madison.

During the period agreement was reached for Madison to acquire 40% of Corovest Fund Managers (Proprietary) Limited, the management company of Coronation International Real Estate Fund (CIREF), with effect from 1 July 2007 for R100,15 million. All conditions precedent have been met with only the approval of the South African Reserve Bank outstanding. CIREF is listed on the London Stock Exchange’s AIM (Alternative Investment Market) and has a current market capitalisation of £85 million.

“Earnings are initially expected to be neutral but will be enhancing in the future. The market capitalisation of CIREF is expected to grow significantly over the next 12 months,” says Wainer.

Madison has also acquired 50% of Property Index Tracker Managers (Proprietary) Limited (PropTrax) which has been appointed as the manager of the newly approved Property Index Tracker Collective Investment Scheme in Securities, an exchange traded fund which will track the performance of the FTSE/JSE SAPY index. PropTrax is scheduled to list on the JSE Limited on Monday, 10 September 2007.

Madison anticipates its distribution for the six months ending 31 December 2007 should exceed 36 cents per linked unit, subject to market conditions remaining stable.

“ApexHi, Hyprop and Redefine are continuing to responsibly expand their portfolios which should enhance their enterprise values and consequently increase the asset management fees to be earned by Madison,” says Cesman.

“The development and leasing divisions, which were established during the period, are expected to continue to perform exceptionally well, thereby contributing significantly to Madison’s earnings,” says Madison director Mike Flax. Madison is currently managing 41 various projects for Redefine, ApexHi and New York based international company Lehman Brothers. These include the Pepkor warehousing hub in Isando and Convention Tower and Sable Square Outlet Shopping Village phase II in Cape Town.

During the period Madison units traded at a high of 1070 cents and closed at 899 cents on 30 June 2007, equating to a market capitalisation of R1,767  billion. Proving suitably liquid 47,8 million Madison linked units traded for R418,8 million on the JSE Limited during the period, equating to 24.4% of the number of linked units in issue.

Last modified on Wednesday, 23 April 2014 19:23

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