| Wed 25 Apr 2007, 17:30 | | PMM - Premium - Media Release - Increases Distribu |
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PMM
PMM
PMM - Premium - Media Release - Increases Distribution By 18,9%
PREMIUM PROPERTIES LIMITED AND ITS SUBSIDIARIES
Incorporated in the Republic of South Africa Registration number: 1994/003601/06
Share Code: PMM & ISIN: ZAE000009254
("Premium")
25 April 2007
Premium Properties Limited increases distribution by 18,9%
Premium`s annual results for the year ended 28 February 2007 reflect a
perpetuation the company`s impressive growth record. The total distribution of
72,5 cents per linked unit equates to an increase of 18,9% from the 61 cents per
linked unit for the previous financial year.
The total distribution includes Premium`s interim distribution of 33,7 cents per
linked unit plus its final distribution of 38,8 cents per linked unit.
At the close of the financial year Premium`s assets exceeded R1,8 billion and
its net asset value had increased by 40% to 1025 cents. The total return to
Premium linked unitholders for the financial year, based on the linked unit
price as at 28 February 2006, was 41,3%. This comprises capital growth of 33,3%
and the 72,5 cents per linked unit distribution.
Premium`s positive performance, according to managing director Jeffrey Wapnick,
can be attributed to the continuing strong trading conditions which resulted in
rentals escalating by some 14% on the renewal of leases. "This combined with
strict expense control, prudent acquisitions and management`s ongoing programme
of redevelopment, have all contributed to the increase in distributable earnings
per linked unit," says Wapnick.
"With a stable local economic outlook and continuing strong trading conditions
Premium is optimistic of achieving further growth in distributions," notes
Wapnick. He cautions however that increases in interest rates during the
previous financial period will have a consequence of slowing distribution
growth.
Premium`s gearing at the end of the financial year was a conservative 34,5%,
while interest rates in respect of 77% of borrowings were fixed at an average
interest rate of 10,8% maturing at various dates ranging from August 2007 to
September 2010.
"It is the policy of the company to hedge the majority of its exposure to
interest rate fluctuations thereby ensuring the sustainability of future growth
in distributions," explains Wapnick.
As a result of the revaluation of Premium`s property portfolio, its value
increased by R314,1 million to R1,794 billion, which represents an increase of
21,4%. Rental income and net rental income from the portfolio increased by 28,6%
and 30,4 % respectively, compared with the previous 12 month period.
Activity within the portfolio clearly indicates that Premium continues to pursue
its strategic objective of acquiring and redeveloping properties in the Pretoria
and Johannesburg CBD and surrounding areas.
In Johannesburg a property was acquired in the CBD for R4,6 million and North
City in Braamfontein was purchased for R21,9 million. The residential conversion
of Brisk Place in the Johannesburg CBD is on schedule to be available for
occupation by July 2007. The total building costs of the Brisk Place project is
R19,6 million and the expected yield is 11%.
In Pretoria, the company acquired seven properties located in the CBD for a
total purchase price of R104 million. These properties include Die Meent,
Poyntons, AVN and Praetor. To date significant value has been extracted from
these properties as a result of strong letting. R3,4 million was spent on the
reconfiguration of the offices at the Trust Bank Building in the Pretoria CBD.
The letting of these smaller offices is progressing well.
"Two residential projects in the Pretoria CBD, which were completed in the
previous financial year, are fully let and the yields achieved are well in
excess of expectations," confirms Wapnick.
The development of The Fields situated in Burnett Street, Hatfield is
progressing well. This project will create 661 residential units as well as
40,000m2 of retail space. The investment is expected to cost in excess of R230
million with an initial yield of approximately 10%. It is anticipated that the
project will be completed early in 2008.
Ends
Date: 25/04/2007 17:30:02 Produced by the JSE SENS Department.
