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Acquisitions are drain for Octodec

Posted On Friday, 10 May 2002 10:01 Published by
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GROWTH through acquisitions has proved to be a drain on earnings for property loan stock company Octodec Investments, whose distribution came in almost flat in the six months to February

GROWTH through acquisitions has proved to be a drain on earnings for property loan stock company Octodec Investments, whose distribution came in almost flat in the six months to February.

Killarney Mall, a shopping centre in Johannesburg's northern suburbs, was added to Octodec's portfolio.

Octodec's interim distribution came in at 23c compared with 22,75c for the previous comparable period, while turnover showed a 74% increase to R41,9m from R24m.

Net rentals improved by 82% to R29,9m from R16,4m.

Octodec's capital expenditure during the period under review stood at R298m. Part of this capital went to the R239m acquisition of Killarney Mall, which has 20800m² of retail space and 10900m² of office space.

About R21m was used to buy a stake in Elardus Park Shopping Centre and R32m acquired Waverley Plaza Shopping Centre.

These acquisitions almost doubled Octodec's portfolio and gave it a greater bias towards the retail sector.

The portfolio's sectoral spread reflects a 45% exposure to the retail sector, 20% to offices, 9% industrial, 20% warehouses and other commercial types. The portfolio showed vacancies of about 9%.

The group also made an extraordinary profit of R275000 out of the sale of one of its properties.

The group said that due to these transactions, comparisons between the period under review and the same period last year were not meaningful.

The company has a capital commitment in respect of a development of R13,5m. The group said it expected a decrease in the distribution to about 22c a linked unit for the second half of the financial year.

'This is mainly due to the effect of our new acquisitions,' it said.

Octodec's linked unit price closed unchanged at 260c on the JSE Securities Exchange SA yesterday.


Publisher: Business Day
Source: Sibonelo Radebe
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