ApexHi Properties Limited has announced a quarterly distribution of 83 cents (A unit: 33,75 cents; B unit: 41,25 cents; C unit: 8 cents) for the three months ended 31 December 2007.

This brings the total distribution for the six months to end December 2007 to 161 cents (A unit: 67,50 cents; B unit: 82,50 cents; C unit: 11 cents) representing a 15% increase in distributions (2006: 140 cents).

ApexHi CEO Gerald Leissner says if non-core income is excluded, the profit from operations increased 20%. Conventional income increased from R562-million at December 2006 to R655-million in 2007, while property expenses have been contained.

“The increase in income can be attributed to rental escalations as well as higher rentals being achieved on renewals. The portfolio realised renewal rental growth of 15% in the office and retail sectors, while the industrial sector renewals have achieved 56% renewal rental growth,” says Leissner.

More than 500 leases were concluded in the six months to end December 2007 on 405 000m2 of space. Some 86% of leases that expired in this period were renewed.

ApexHi acquired properties for R173-million in the period under review, and approved refurbishment costs of nearly R500-million.

Going forward, Leissner says growth in distributions will continue to be driven by rental growth. “Core earnings for the second half of the financial year are expected to exceed those of the first, with limited downside risk, as many of the significant leases expiring within the next six months have been renewed or are currently under negotiation,” he says.

Fluctuations in interest rates will not affect earnings as interest rates have been fixed.

Development profits are expected to be realised from the Berea residential conversion. Leissner says to date 118 of the 133 sectional title units have been sold, of which finance has been approved for 47 units. “The successful conversion and sale of all the units is expected to generate approximately R20-million (7,5 cents) in distributable non-core earnings.

“We are expecting a combined distribution for the 2008 financial year of between 334 cents and 337 cents,” says Leissner.