With continued harsh trading conditions in the property industry it may be hard to reduce the vacancy, which represents 8,8% of Metboard's total lettable area.

Releasing its results yesterday, the group said a large portion of the vacant space would be difficult to let and would remain vacant for most of financial 2003.

The group said that during the past three months of the financial year ended March, circumstances arose that had a negative effect on its results. This had also made it impossible to achieve its forecast in distributions.

'The major contributing factors included loss of rental due to certain tenant insolvency, certain budgeted lettings not materialising, bad debts and leases being renewed at levels lower than budget in order to retain certain tenants,' said the group.

The figures showed a slight improvement in headline earnings a share from 35,6c to 39,2c.

The group said figures for the year under review were not directly comparable to those of the previous year because of huge acquisitions that took place.

The acquisitions, made in three separate transactions, brought an additional 32 properties to Metboard's portfolio.

As a result, the group's turnover and net operating income increased 63% and 62% respectively. Turnover was R130,9m from R80,3m and operating income R61,8m from R38,2m.

The acquisitions had included the purchase of 24 properties from Old Mutual Life Assurance Company for R195,6m.

The group acquired a further five properties from PGWood Industries for R30m and three properties from Nogaprops for R11m. It said the acquisitions had enhanced its portfolio, giving it a greater geographical spread.

The portfolio consisted of 149 properties with a total gross lettable area of more than 1-million square metres valued at R914m.

Business Day