Octodec interim distribution to investors is up by 14.1%

Posted On Tuesday, 22 April 2008 02:00 Published by eProp Commercial Property News
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Octodec Investments Limited has announced a distribution of 61.6 cents per linked unit for its six-month interim period to 29 February 2008, representing a growth in interim distributions of a noteworthy 14.1%

Jeffrey WapnickIn 2007 the distribution was 54 cents per linked unit.

Once again reporting excellent growth in distributions to its linked unitholders, Octodec’s total investments exceed R2,3 billion while  the company’s rental income and net rental income increased by 20.2% and 16.4% respectively.

Managing director of Octodec Investments Limited, Jeffrey Wapnick, attributes the company’s growth in distributable earnings and solid performance to the redevelopment of properties, the favourable renewal of leases, strict expense control as well as positive trading conditions.

“We are optimistic that Octodec will continue to deliver above average distribution growth despite the current economic environment, specifically the tightening of consumer spending as well as the increases in the interest rates, which is likely to have an impact on the distribution growth of the entire sector,” says Wapnick.

The value of Octodec’s property portfolio increased by R104,6 million as a result of the revaluation of the portfolio, increasing net asset value by 6.9% to 1573 cents.

The JSE-listed property loan stock’s retail property portfolio comprises five quality shopping centres. “Continued strong growth in earnings has been experienced for these properties due to favourable renewals and contractual rental escalations,” notes Wapnick. The growth in rental income from this portfolio amounted to 9%. However, an increase in bad debts was noted during the period and management is addressing this challenge with regards to policies and procedures relating to the collections of rent.

Octodec purchased and transferred two properties for an aggregate of R53 million during the period under review, one of which is Rentmeester, an office block situated in Val-de-Grace, Pretoria.

Unlocking the value in its existing portfolio, Octodec continued the strategic redevelopment and refurbishment of its Johannesburg and Pretoria CBD property portfolio. Construction has commenced at Fine Art, Jo’burg CBD, as part of the R10 million refurbishment of the building. The Tiny Town residential development, which is situated adjacent to the Union Building, is due to commence in mid 2008.

During the period Octodec’s borrowings increased by R79 million as a result of new acquisitions and development costs, bringing its gearing 22% at the close of the period, compared to 24% at 31 August 2007. Interest rates in respect of 57% of Octodec’s borrowings at 29 February 2008 have been fixed at an average interest rate of 10.2% maturing at various dates ranging from October 2008 to November 2010. Facilities in excess of R300 million are available to Octodec to fund future cash flow requirements.

The strong performance of the associate company IPS, with its property portfolio valued in excess of R650 million, together with the advance of additional funds from Octodec to finance IPS’s growth, resulted in interest income and dividends received increasing to R5,3 million.

Last modified on Monday, 21 April 2014 20:15

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