By Nick Wilson

Property unit trust SA Corporate Real Estate Fund, the third-largest listed property fund with a market capitalisation of R7,9bn, on Monday reported a 19% increase in distributions for the year to December, compared with the annualised results of the previous year.

CEO Craig Ewin said the growth was ahead of the 31,55c forecast contained in a March circular to unitholders, but that it also included a once-off contribution of 2,4c a unit.

The 2,4c arose through an interim distribution of 17c a unit as a result of the acquisition of listed property loan stock company SA Retail Properties by SA Corporate. Without this contribution, distributions for the year would have increased 10%.

Ewin said the financial year was characterised by major expansion with SA Corporate having acquired R4,7bn worth of properties over the past 12 months. He also said it was difficult to compare the results with the previous year as the company’s year end had changed and last year’s period was 17 months.

The property portfolio had also changed dramatically since the previous set of results were issued.

Keillen Ndlovu, a fund manager at Stanlib, said it had been a “very active year” as shown by the number of acquisitions and developments.

“The results are average if one strips out the sweetener from the SA Retail acquisition. The industrial portion has positive prospects but the retail portion, which is 59% of the portfolio, is a bit of a concern in this shaky retail environment.”

Ewin said that about 20% of retail space would be up for renewal this year and that the potential for rental growth was low.

He said there were signs that retail spend was slowing down and that SA Corporate saw “uncertainty in this market”.

However, Ewin said the company had not yet seen any “tenant failure” within its retail property portfolio .

He said that the outlook for industrial property was positive.

Source: Business Day