VKE - Vukile- Economic Growth fuelling further ren
VKE
VKE
VKE - Vukile- Economic Growth fuelling further rental increases
Vukile Property Fund Limited
(Incorporated in the Republic of South Africa)
Registration number 2002/027194/06
JSE code: VKE & ISIN: ZAE000056370
ECONOMIC GROWTH FUELLING FURTHER RENTAL INCREASES
Johannesburg, 25 June 2007 - Sustained economic growth could result in double-
digit rental increases in the office sector of South Africa`s property market,
Vukile says in its 2007 annual report published today.
Chairman Anton Botha and chief executive Gerhard van Zyl say the underlying
fundamentals of the commercial property market remain strong, with vacancy
levels expected to decrease again this year, prompting further rental increases.
They also expect capitalisation rates to continue to strengthen
"The viability of new projects is, however, being impacted by the rise in
building costs, while in the industrial sector, the lack of suitable land is
also limiting the potential for new developments. It is estimated that A-grade
building costs now require net rentals on new office buildings to exceed
R100/m2, well above the average current levels," they say. "Significant
infrastructural expenditure on such developments as the World Cup, the Gautrain
and the Coega IDZ will place further pressure on building costs in the year
ahead."
Noting that the past year`s consolidation in the listed property sector was
expected to continue, they describe this as a positive trend for the industry
and its investors.
"Fewer but larger entities will improve liquidity and increase the market
capitalisation of stocks in this sector. A reduction in the number of property
companies will also see a commensurate increase in the number of premium, high-
yield assets in their prospective portfolios," they say.
With a portfolio capable of generating good long-term yields, impeccable BEE
credentials and a prudent debt structure, Vukile is well placed to take full
advantage of the favourable trading conditions in its market.
"In the year ahead, Vukile will continue to pursue its proven growth strategy,
seeking new investment opportunities at acceptable yields while at the same time
revamping or enlarging existing properties where appropriate. A further
priority will be to investigate and implement cost-saving measures in the
portfolio," they say.
For further information call Gerhard van Zyl, CEO Vukile Property Fund Limited
on (011) 288 1002
Issued by du Plessis Associates on behalf of Vukile Property Fund Limited.
dPA contact Frank du Plessis Tel : +27 11 728 4701, Fax: +27 11 728 2547,
Mobile: 082 641 0435 or e-mail: vukile@dpapr.com
www.vukileprops.co.za
Date: 25/06/2007 10:22:01 Produced by the JSE SENS Department.
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