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ACP
ACP
ACP - Acucap - Reviewed Consolidated Interim Results For The 6 Months Ended 30
September 2008
ACUCAP PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2001/021725/06)
Share code: ACP
ISIN: ZAE000037651
("Acucap")
REVIEWED CONSOLIDATED INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2008
30 September 31 March 30 September
2008 2008 2007
R`000 R`000 R`000
ABRIDGED CONSOLIDATED BALANCE
SHEET
Assets
Property Assets 5 438 365 5 655 482 4 698 552
Investment properties 4 804 269 4 923 576 3 991 456
Long term receivable 93 950 107 434 89 254
Short term receivable 22 206 15 680 7 831
Investment properties and 4 920 425 5 046 690 4 088 541
related
receivables
Investment properties held 299 645 411 950 406 665
for sale
Investment properties under 176 173 161 990 152 456
development
Owner-occupied property 10 312 10 404 1 957
Property development 31 810 24 448 22 660
inventory
Other property assets - - 26 273
Other non current assets 1 133 782 924 314 196 615
Loans in respect of unit 222 426 222 694 154 967
purchase scheme
Equipment 1 361 1 208 3 004
Listed investments 662 445 643 642 25 621
Other investments 1 120 - 1 674
Intangible assets 212 579 - -
Goodwill 4 370 - -
Financial instruments - 25 785 11 235
Deferred tax asset 29 481 30 985 114
Other current assets 151 515 73 839 31 740
Trade and other receivables 110 951 60 729 24 560
Cash and cash equivalents 40 564 13 110 7 180
Total assets 6 723 662 6 653 635 4 926 907
Equity and liabilities
Shareholders` interest 2 134 175 2 110 213 1 726 019
Share capital and share 1 319 925 1 211 285 789 332
premium
Non-distributable reserve 923 822 988 146 1 032 429
Accumulated loss (109 572) (89 218) (95 742)
Non current liabilities 4 082 618 3 262 408 3 048 778
Debentures 1 369 120 1 289 200 1 092 561
Financial liabilities 2 329 987 1 604 149 1 606 024
BEE instrument 35 284 48 256 69 136
Financial instruments 32 286 - -
Deferred tax liabilities 315 941 320 803 281 057
Current liabilities 506 869 1 281 014 152 110
Trade and other payables 127 910 93 622 59 610
Financial liabilities 200 488 1 032 136 44 543
Tax payable 12 230 10 411 8 101
Debenture interest payable 166 241 144 845 39 856
Total equity and liabilities 6 723 662 6 653 635 4 926 907
ABRIDGED CONSOLIDATED INCOME
STATEMENT
for the 6 months ended 30
September 2008
6 months year ended 6 months
ended 31 March ended
30 September 2008 30 September
2008 2007
R`000 R`000 R`000
Revenue 263 311 427 594 155 910
- Contractual 261 051 404 784 150 945
- Straight lining 2 260 22 810 4 965
Net operating expenses (30 443) (57 493) (17 512)
(Loss) / profit on sale of (8 985) 10 965 2 719
properties
section 311 expenses - (2 287) (2 287)
Profit before fair value
adjustments,
interest and taxation 223 883 378 779 138 830
Fair value adjustment to 5 085 100 515 24 018
investment
properties
Fair value adjustment to (22 862) - -
government bonds
Fair value adjustment to BEE 12 972 22 322 1 441
instrument
Profit before interest and 219 078 501 616 164 289
taxation
Interest received 48 863 33 253 20 790
Interest paid
- Debenture holders - special - (67 407) (67 407)
- Debenture holders - interim (175 220) (39 856) (39 856)
- Debenture holders - final - (152 517) -
- Financial Institutions and (129 037) (134 114) (42 985)
other
(Loss) / profit before taxation (36 316) 140 975 34 831
Taxation 2 682 (31 457) 544
(Loss) / profit for the period (33 634) 109 518 35 375
Reconciliation of profit for the
period to headline (loss)/
earnings
(Loss) / profit for the period (33 634) 109 518 35 375
Fair value adjustment to (5 085) (100 515) (24 018)
investment properties
Fair value adjustment to 22 862 - -
government bonds
Profit on disposal of investment 8 985 (10 965) (2 719)
properties
Tax effects 979 17 505 2 813
Headline (loss) / earnings - (5 893) 15 543 11 451
shares
Interest paid to debenture 175 220 259 780 107 263
holders
Headline earnings - linked units 169 327 275 323 118 714
Cents Cents Cents
Basic and diluted (loss)/earnings (24.89) 98.15 36.62
per share
Headline earnings per linked unit 125.31 246.74 122.91
Interest Distribution per linked 121.30 221.11 108.87
unit
- Interim 121.30 36.83 36.83
- Special - 72.04 72.04
- Final - 112.24 -
Abridged
Statement of
changes in
equity
for the 6
months ended
30 September
2008
Shares Share Share Non Accumulat Total
issued capital Premium Distribut- ed loss
able
Reserve
Number R`000 R`000 R`000 R`000 R`000
Balance at 31 93 567 599 94 442 163 959 239 (100 771) 1 300 725
March 2007
Issue of 15 15 797 910 16 347 060 - - 347 076
797 910
shares in
August 2007
Proceeds - 16 337 270 - - 337 286
Adjustment of - - 9 953 - - 9 953
issue price
on effective
date of
acquisition
of investment
in Atlas
Share issue - - (163) - - (163)
costs
Income - - - 42 844 - 42 844
recognised
directly in
equity
Net change in - - - 38 674 - 38 674
fair value of
listed
investments
Net change in - - - 4 170 - 4 170
fair value of
cash flow
hedge
recognised
directly in
equity
Profit for - - - - 35 375 35 375
the period
Transfer to - - - 30 346 (30 346) -
non-
distributable
reserve
Balance at 30 109 365 509 110 789 223 1 032 429 (95 742) 1 726 020
September
2007
Issue of 17 17 603 596 17 378 054 - - 378 071
603 596
shares in
October 2007
Proceeds - 17 387 438 - - 387 455
Adjustment of - - (9 330) - - (9 330)
issue price
on effective
date of
acquisition
of investment
in Intaprop
Share issue - - (54) - - (54)
costs
Issue of 2 2 080 000 2 43 879 - - 43 881
080 000
shares in
November 2007
Expenses - - - (111 902) - (111 902)
recognised
directly in
equity
Net change in - - - (126 453) - (126 453)
fair value of
listed
investments
Net change in - - - 14 551 - 14 551
fair value of
cash flow
hedge
recognised
directly in
equity
Profit for - - - - 74 143 74 143
the period
Transfer to - - - 67 619 (67 619) -
non-
distributable
reserve
Balance at 31 129 049 105 129 1 211 156 988 146 (89 218) 2 110 213
March 2008
Issue of 8 8 000 000 8 108 632 - - 108 640
000 000
shares in May
2008
Proceeds - 8 108 712 - - 108 720
Share issue - - (80) - - (80)
costs
Expenses - - - (51 044) - (51 044)
recognised
directly in
equity
Net change in - - - 7 028 - 7 028
fair value of
listed
investments
Net change in - - - (58 072) - (58 072)
fair value of
cash flow
hedge
recognised
directly in
equity
Loss for the - - - - ( 33 634) (33 634)
period
Transfer to - - - (13 280) 13 280 -
non-
distributable
reserve
Balance at 30 137 049 105 137 1 319 788 923 822 (109 572) 2 134 175
September
2008
ABRIDGED CONSOLIDATED CASH FLOW
STATEMENT
for the 6 months ended 30
September 2008
6 months year ended 6 months
ended 31 March ended 30
30 2008 September
September 2007
2008
R`000 R`000 R`000
Cash flows from operating
activities
Cash generated by operations 217 664 342 472 132 297
Income tax paid (1 321) (47) 175
Interest received 47 333 42 930 35 365
Interest paid (282 861) (378 677) (202 706)
Net cash (outflows) / inflows (19 185) 6 678 (34 869)
from operating
activities
Cash outflows from investing (13 249) (1 466 (886 648)
activities 111)
Cash inflows from financing 59 888 1 466 768 922 922
activities
Net cash inflows for the period 27 454 7 335 1 405
Cash and cash equivalents at 13 110 5 775 5 775
beginning of period
Cash and cash equivalents at end 40 564 13 110 7 180
of period
Segmental results
for the 6 months ended 30 September 2008
6 months 6 months
ended ended 30
30 September September
2008 2007
R`000 R`000
Retail Segment revenue (external 162 749 112 574
customers)
Net operating expenses (7 721) (11 209)
Fair value adjustment to 1 097 (6 296)
investment properties
Segmental results 156 125 95 069
Offices Segment revenue (external 87 654 37 633
customers)
Net operating expenses (2 719) (1 286)
Fair value adjustment to 3 955 (2 229)
investment properties
Loss on disposal of investment (8 194) -
properties
Segmental results 80 696 34 118
Industrial Segment revenue (external 6 583 5 703
customers)
Net operating expenses (418) (1 003)
Loss on disposal of investment (791) 2 719
properties
Fair value adjustment to 33 32 543
investment properties
Segmental results 5 407 39 962
Property Segment revenue (external 6 325 -
development customers)
Net operating (expenses) / income (1 324) 2 676
Segmental results 5 001 2 676
Reconciliation to profit before interest and taxation for the period in
the income statement
Revenue 263 311 155 910
Allocated operating expenses (12 182) (10 822)
Unallocated operating expenses (18 261) (6 690)
(Loss)/ profit on disposal of (8 985) 2 719
investment properties
Section 311 expenses - (2 287)
Fair value adjustment to investment 5 085 24 018
properties
Fair value adjustment to government (22 862) -
bonds
Fair value adjustment to BEE 12 972 1 441
instrument
Profit before interest and taxation 219 078 164 289
BASIS OF PREPARATION AND REVIEW CONCLUSION
The interim financial results are prepared in accordance with International
Financial Reporting Standards (IFRS) and IAS 34, as well as the requirements
of the Companies Act in South Africa, and on a basis consistent with the
company`s most recent audited annual financial statements.
KPMG Inc., the company`s independent auditor, has reviewed the interim
financial statements contained in this interim report and has expressed an
unmodified conclusion on the interim financial results. Their review report is
available for inspection at the company`s registered office.
COMMENTARY
1. REVIEW OF RESULTS AND OPERATIONS
The directors of Acucap are pleased to report a distribution of 121.30 cents
per linked unit for the six months ended 30 September 2008. This represents an
11.4% increase compared to the same period last year.
The Atlas and Intaprop businesses have been successfully integrated into
Acucap, and the assets acquired are performing well under the direction of the
Acucap asset management team. Within the original Atlas portfolio, 38
properties were identified as non-core and sold, and 33 of these have been
transferred. The last remaining properties should be off Acucap`s register by
the end of the financial year, bring the rationalisation of the Atlas
portfolio to a successful conclusion. Two of the smaller Intaprop buildings
were also sold, in line with Acucap`s strategic intention of constructing its
core portfolio around a small number of large, high quality assets.
During the six month period under review, a total of 6 properties were sold,
including the two non-core Intaprop buildings referred to above. These
properties were sold for a combined net value of R215.7million, against their
combined carrying value, based on March 2008 valuations, of R206.6million. The
forward yield on disposal was 9.7%, and on transfer, the funds will be applied
to retiring floating rate debt, currently priced at 13.2%.
On the basis of individual assets and asset segments, Acucap`s net income is
attributable as follows:
% of Net % of
Contractual total property total
rental income *
income
R 000`s R 000`s
Festival Mall 41,896 16.4% 40,387 17.2%
Key West 25,702 10.1% 25,144 10.7%
Other retail 87,908 34.5% 77,681 33.0%
Offices 72,338 28.4% 68,129 29.0%
Industrial 2,881 1.1% 2,670 1.1%
Core portfolio 230,725 90.6% 214,011 91.0%
Acquisitions and 24,001 9.4% 21,076 9.0%
disposals
254,726 100% 235,087 100%
2. SIMPLIFIED FINANCIAL
INFORMATION
Consistent with previous
results announcements, a
simplified distribution income
statement is presented below.
Note R`000
Revenue 1 261,051
Net operating expenses 2 (30,395)
Profit before interest and taxation 230,656
Interest received 4 41,705
Other interest paid 6 (117,895)
Helderberg units sold not yet transferred 21,989
Profit for the period 176,455
Number of linked units in issue 7 145,470,099
Distribution for the six months ended 30 121.30
September 2008
Distribution for the six months ended 30 108.87
September 2007
Distribution growth 11.42%
Notes to the simplified distribution
income statement
1 Revenue as stated 263,311
Less : straight lining revenue reversed (2,260)
261,051
2 Net operating expenses as stated (30,443)
Add : Thesele expenses 48
(30,395)
3 Loss on sale of properties as stated (8,985)
Add : Non-distributable capital loss 8,985
reversed
0
4 Interest received as stated 48,863
Less : Prepaid Mar-08 interest on May-08 (8,979)
unit issue
Add : Interest received from Thesele, 1,821
previously eliminated on consolidation
41,705
5 Fair value adjustments as stated (4,805)
Add : Fair value adjustments reversed 4,805
0
6 Other interest paid as stated (129,037)
Add : Other interest paid by Thesele, 11,096
previously included on consolidation
Less : Net reversal of interest provided 46
from period end to distribution payment
date
(117,895)
7 Number of linked units in issue at 30 137,049,105
September 2008
Thesele linked units previously treated 8,420,994
as treasury units on consolidation
145,470,099
3. SYCOM TRANSACTION
The terms of the Sycom transaction were announced on SENS on 4 March 2008, and
the final regulatory approvals were obtained on 25 September 2008, from which
date the acquisition of Sycom`s asset manager, Sycom Property Fund Management
Limited (`SPFM`), became effective. The Acucap and Parkdev asset management
teams have been working side by side on an informal basis from the early
stages of this transaction, and the Acucap team formally assumed control of
the administration of the Sycom portfolio from October 2008. On 24 October,
Paul Theodosiou and Gavin Jones, both from Acucap, were appointed to the board
of SPFM.
Acucap`s interest in Sycom was based on the perceived quality of that fund`s
property portfolio, and Sycom`s results for the six months to 30 September
2008, released at the same time as Acucap`s results, clearly demonstrate the
superior growth prospects of this high quality portfolio. Looking forward,
Acucap will continue to focus on strategies to achieve a merger of these
assets into its portfolio, at the same time recognising the interest of Hyprop
in the Sycom assets, and working co-operatively towards an outcome that will
be favourable for unit holders in all three funds, as well as Parkdev,
Acucap`s co-owner in SPFM.
4. HELDERBERG VILLAGE
A total of 11 units were sold in the six months under review, and a further 8
units are budgeted for sale in the remaining 6 months of the current financial
year. The forecast for the 2010 financial year includes 12 units, and for the
2011 year, the final 6 units will be sold. Acucap has accelerated the
Helderberg sale program in the current financial year to mitigate the funding
costs of the Sycom transaction, but the contribution from Helderberg will
gradually be reduced as the underlying income from the Sycom deal grows, and
as other initiatives assist in reducing Acucap`s cost of funding, including
further progress in the non-core asset sale program, referred to under 1.
above, where it has been noted that R215.7million of such properties have been
disposed of at an average yield of 9.7%, to retire prime linked debt.
5. DEVELOPMENTS WITHIN THE PROPERTY PORTFOLIO
Retail portfolio
Acucap`s retail portfolio has continued to display its defensive attributes in
the current retail slowdown. The consolidated regional performance showed
nominal turnover growth of 11.28% in the quarter ended 30 September 2008
compared with the same quarter last year. Footcounts increased by a more muted
5.14% in the same period. The consolidated community centre performance showed
nominal turnover growth of 11.58% in the quarter ended 30 September 2008
compared with the same quarter last year. Footcounts, however, decreased by
1.21% in the same period. Development activities in the retail portfolio are
summarised below:
Rondebosch Village Shopping Centre
The final phase of this redevelopment commenced on 15 January 2008, and
involved the addition of a 105 bay structured parking deck, and the conversion
of the former cinema space into 1,000m2 of offices. The work is due to be
completed by April 2009, at an estimated cost of R34.5million and an initial
yield of 9.5%. The Pick `n Pay Family store will be converted to a corporate
store, in terms of an agreement with Pick `n Pay, and a new 15 year lease will
be signed, commencing in April 2009. The existing store will be completely
refurbished at a cost of R14million, with Acucap contributing R9million at an
initial 8% yield, based on the new Pick `n Pay rental. The redevelopment of
this asset will position it to offer sustained income growth for the
foreseeable future.
Festival Mall
The most recent re-tenanting comprised the opening of a new Boardmans store in
June 2008. Emphasis is now being given to strengthening the tenant mix in the
lead-in malls, and to fairly extensive site works, facade redecoration,
upgrading roadways, completing perimeter security and introducing paid
parking, all of which should be complete by the end of November 2008.
The total capital cost to complete all re-development activities is
R28.5million, with an anticipated first year of 9.7%.
Key West
In August 2008 Acucap commenced the work relating to the introduction of paid
parking, remedial work to the parking areas and the upgrade to the Virgin
Active Gym entrance and internals. This work is scheduled for completion on
the 17 November 2008. The capital cost is R8.5million with an anticipated
yield of 10.4% for the first year. Virgin Active Gym is spending a further
R4million on their internal fit out and upgrade.
Bayside Mall
The development of a new store for Mr Price Home is progressing well and the
premises will be ready for beneficial occupation before the end of November.
By replacing the under-performing line shops with the new Mr Price Home, the
reconfiguration is expected to consolidate this section of the shopping
centre. The rights to increase the gross lettable area "GLA" of the property
to 52,000m2 have been approved and planning is current well underway with
various national tenants to utilise the additional available bulk and
strengthen the overall tenant mix.
Office Portfolio
28 Fricker Road, Illovo
AON South Africa terminated its lease over the property during the period
under review, resulting in a vacancy of 6,230m2. At 30 September 2008 the
property was 90% let, leaving a vacancy of 631m2. This vacancy includes 93m2
of storage space. An average gross rental of R120/m2 was achieved.
Golf Park, Mowbray
Leases over a gross lettable area of 4,885m2 expired during the 6 months ended
30 September 2008. These leases were successfully renewed at market related
rentals, which on average exceeded the rental rates prior to renewal.
82 Grayston Drive, Sandton
82 Grayston Drive formed part of the Intaprop portfolio which was acquired
during the previous financial year. The property was subject to a head lease
at a net rate of R104/m2 inclusive of parking. The head lease expired on 30
September 2008, at which date the property was fully let at an average net
rental of R115/m2 inclusive of parking. The property has a GLA of 7,226m2.
The Village, Faerie Glen
The refurbishment of The Village, Faerie Glenn will be completed during
November 2008 at a total cost of R17,5 million. As part of the refurbishment,
the lettable area has been increased by 1,200m2 through the creation of loft
levels in five of the six buildings. To date 439m2 of the additional space has
been let, with the remainder being actively marketed. An additional 72 parking
bays have also been provided, and the additional rental income will result in
an anticipated initial yield of 9% on the project.
Industrial portfolio
N1 Business Park, Midrand
Siemens have leased a new building measuring 3,070m2, and negotiations are in
progress to give them a larger presence in the park.
Eli Lilly South Africa took occupation of their 2,092m2 facility in June. The
lease runs for 10 years from 01 July 2008 and offers an initial yield of
10.65%.
Landis & Gyr have signed a 10 year lease over a 4,600m2 facility. Lease
commencement is 01 April 2009 and will offer an initial yield of 10.34%. We
are on schedule with site and building works to meet the commencement date.
Construction has commenced on two additional buildings, one of 7,800m2, and
one of 9,000m2 both for single tenants with whom negotiations are well
advanced.
To date, 17,667m2 of warehouse space has been leased, and 16,800m2 is under
final negotiation following `in-principle` agreement on terms. The high
quality of the park, its low bulk, the modern building construction and the
site`s good access and visibility have made it possible to achieve superior
rentals and long lease tenure.
6. BORROWINGS
The company has fixed the interest rate on 68% (2007:64%) of its facilities
with unexpired terms varying between 9 months and 15 years. The weighted
average rate for interest rate swaps is 10.73%, and the weighted average term
to maturity is 8 years. Details are as follows:
Outstanding All-in interest Maturity
balance 30 rate date
September
2008
R 000`s
FIXED 1,704,151
60,000 9.61% Aug 09
50,000 11.37% Oct 09
50,000 10.26% Sep 11
50,000 10.20% Oct 11
50,000 9.73% Dec 11
50,000 13.20% Mar 12
50,000 10.05% Oct 12
200,000 11.23% Feb 13
50,000 9.80% Oct 13
120,000 9.95% Oct 13
70,000 11.15% Aug 16
50,000 10.71% Sep 16
50,000 10.94% Jul 17
50,000 11.63% Jul 19
50,000 11.08% Jul 20
50,000 10.91% Aug 20
50,000 10.44% Sep 20
250,000 11.73% May 21
50,000 10.93% Jul 23
100,000 9.98% Oct 23
204,151 9.78% See note #
FLOATING 803 462
468,051 prime less 2.3%
200,000 Rod plus 0.55% See note *
50,000 Jibar plus 1.1%
85,411 prime less 2.0%
TOTAL
2,507,613
# Short position on R186
Government Bond R107,220,530 at
effective 9.79%
Short position on R209
Government Bond R96,930,006 at
effective 9.03%
* Rod - Rand Overnight Deposit
rate
7. LEASE EXPIRY, THROUGH RENTAL
AND ESCALATION DATA
The forward lease expiry profile
of the portfolio is detailed
below, categorized as to (1)
major retail assets (Festival
Mall, Key West, Gardens Centre,
Bayside Mall (50%), The Bridge
(27.6%)), (2) other retail assets
and (3) offices. It provides a
comprehensive profile of all
contractual lease expiries :
Total Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
MAJOR RETAIL
ASSETS
Expiry (% of 44.0% 4.2% 8.8% 9.2% 9.7% 4.7% 7.4%
total income)
National 30.0% 2.3% 6.6% 4.8% 7.0% 2.8% 6.6%
tenants
Other 14.0% 1.9% 2.3% 4.3% 2.8% 1.9% 0.8%
Average rate 88.81 100.49 94.19 101.21 110.57 103.76 54.18
mSquared
National 75.68 71.79 83.20 85.07 96.08 89.08 52.54
tenants
Other 141.44 191.38 152.37 128.43 178.52 136.45 73.31
Average 8.1% 8.6% 8.4% 8.4% 8.6% 8.1% 6.6%
escalation
rate
National 7.7% 7.6% 8.2% 7.6% 8.4% 7.3% 6.6%
tenants
Other 9.1% 9.7% 9.0% 9.3% 9.1% 9.2% 6.0%
OTHER RETAIL
ASSETS
Expiry (% of 24.5% 4.6% 3.1% 3.4% 2.4% 4.4% 6.6%
total income)
National 16.0% 2.6% 1.4% 1.8% 1.1% 3.2% 5.9%
tenants
Other 8.5% 2.0% 1.7% 1.6% 1.3% 1.2% 0.7%
Average rate 78.20 83.58 89.63 78.61 97.83 113.83 56.33
mSquared
National 65.20 68.06 66.44 58.46 74.42 101.50 54.09
tenants
Other 125.26 117.45 126.16 130.36 136.22 167.04 84.81
Average 7.2% 8.1% 8.7% 7.9% 8.2% 8.2% 4.4%
escalation
rate
National 6.1% 6.9% 7.8% 6.4% 7.3% 8.0% 3.9%
tenants
Other 9.2% 9.6% 9.5% 9.6% 9.0% 8.7% 8.2%
OFFICES
Expiry (% of 30.0% 5.3% 3.3% 2.1% 3.4% 4.7% 11.1%
total income)
Large 20.1% 3.2% 2.0% 0.8% 2.4% 2.4% 9.4%
corporates &
government
Other 10.0% 2.2% 1.4% 1.3% 1.0% 2.3% 1.8%
Average rate 99.27 82.62 102.24 99.31 103.97 107.27 103.59
mSquared
Large 99.90
corporates & 84.20 117.06 110.89 108.33 100.69 100.06
government
Other
98.02 80.43 86.42 93.25 95.16 114.93 127.66
Average 8.6% 8.8% 9.3% 8.7% 9.1% 8.2% 8.2%
escalation
rate
Large 8.7% 8.8% 9.6% 8.4% 9.3% 9.9% 8.1%
corporates &
government
Other 8.3% 8.9% 9.0% 8.9% 8.9% 6.4% 8.9%
INDUSTRIAL
ASSETS
Expiry (% of 1.4% 0.0% 0.0% 0.0% 0.0% 0.0% 1.4%
total income)
National 0.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.3%
tenants
Other 1.1% 0.0% 0.0% 0.0% 0.0% 0.0% 1.1%
Average rate 40.69 40.69
mSquared
National 52.02 - - - - - 52.02
tenants
Other 38.52 - - - - - 38.52
Average 7.0% 7.0%
escalation
rate
National 7.2% - - - - - 7.2%
tenants
Other 7.0% - - - - - 7.0%
TOTAL
Expiry (% of 100.0% 14.1% 15.2% 14.7% 15.6% 13.9% 26.5%
total income)
National 66.4% 8.0% 9.9% 7.5% 10.5% 8.4% 22.1%
tenants
Other 33.6% 6.1% 5.3% 7.2% 5.1% 5.5% 4.4%
Average rate 87.20 87.63 94.85 94.68 106.91 108.01 67.01
mSquared
National 78.23 74.82 85.07 78.40 95.52 96.79 66.36
tenants
Other 112.79 112.96 120.83 120.58 141.90 131.30 70.47
Average 8.0% 8.5% 8.7% 8.3% 8.6% 8.1% 6.7%
escalation
rate
National 7.6% 7.8% 8.4% 7.4% 8.5% 8.3% 6.5%
tenants
Other 8.8% 9.4% 9.2% 9.3% 9.0% 7.9% 7.8%
Total GLA Leased Vacant Vacancy %
Major retail 177 716 175 805 1 911 1.1%
Other retail 117 063 111 008 6 055 5.2%
Offices 108 810 107 236 1 574 1.4%
Industrial 12 416 12 416 0 0%
TOTAL 416 005 406 465 9 540 2.3%
Approximately 60% of the vacancy
in `other retail` consists of
planned vacancies in Rondebosch
Village, Westville Mall, Howard
Centre and East Rand Value Mall,
where redevelopments are either
under way, or are in the planning
stage.
8. RETAIL PORTFOLIO PERFORMANCE
As noted under section 5 above,
the retail portfolio showed good
defensive qualities in the six
months to 30 September 2008,
posting a substantially better
performance than the Statistics
SA national average for retail
sales. The table below shows
turnover contribution within
Acucap`s retail portfolio,
reported by retail segment :
Segment Segment: % of
Turnover
Food Majors 33.7%
Fashion 29.5%
Home & Furniture 4.3%
Electronics 2.7%
Mass Discounters 4.3%
Health & Beauty 6.3%
Food Service 6.0%
Cinemas 0.3%
Hardware 1.2%
Books/Cards/Stationery 2.4%
Jewellery 1.2%
Optometrists 1.1%
Sporting & Outdoors 1.2%
Other 5.9%
100.0%
The chart below shows how the
major retail segments performed
in the last two quarters making
up the current reporting cycle,
with the June and September
quarters shown separately, and
reported year-on-year for June
and September, and also quarter-
on-quarter for June and
September:
Segment Jun Y-o-Y Sep Y-o-Y Jun Q-o-Q Sep Q-o-Q
Food Majors 11.8% 13.7% 18.4% 16.7%
Fashion 5.5% 4.0% 2.6% 4.2%
Home -12.2% -11.4% -10.8% -5.5%
Electronics 9.3% 4.5% 16.7% -1.8%
Mass n/a n/a 23.2% 15.6%
Discounters
Health & Beauty 15.4% 10.4% 4.6% 6.4%
Food Service 0.7% 1.5% 3.5% 6.7%
Cinemas 2.0% -1.4% 7.3% -4.2%
9. RECONCILIATION OF LEASE
EXPIRIES WITH NEW LEASES AND
RENEWALS
The table below provides a
reconciliation of lease expiries
with new leases and renewals over
the six month period from 1 April
2008 to 30 September 2008 :
Expiries Average Average New Average Average
and through escalati leases through escalatio
terminatio rent at on rate and rent for n for new
ns expiry at renewals new leases
expiry leases
Regional 9 497 90.69 8.9% 9 152 103.39 8.4%
Retail
Community 5 702 115.26 9.0% 3 862 143.62 8.9%
retail
Neighbourhood 3 179 73.32 8.4% 2 293 65.29 7.1%
and other
retail
Offices 11 225 106.98 10.5% 11 613 110.70 8.6%
Total 29 603 26 920
Regional retail: Festival Mall,
Key West, Bayside Centre, The
Bridge
Community retail: Gardens Centre,
Howard Centre, Randfontein
Village, East Rand Value Mall,
Sunward Centre, Roodepoort
Hyperama, Westville Mall,
Hillcrest
The following table places the
six month pattern of expiries and
renewals within the context of an
overall reconciliation of change
in the gross lettable area of the
combined Acucap portfolio:
GLA at Expiries Renewa New Area Propertie GLA at 30
31 and ls leases added s sold September
March terminat and 2008
2008 ions renewals
Total 439 329 (25 045) 16 794 8 252 1 735 (25 061) 416 004
- leased 432 069 (29 601) 16 794 10 126 1 735 (24 659) 406 464
- vacant 7 260 4 556 (1 874) ( 402) 9 540
10. UNITHOLDERS
A table of Acucap`s major
unit holders is set out below :
Acucap unitholders at 30 September 2008
Entities controlling > 5% of issued
units
Stanlib Asset Managers 17.9%
Coronation Fund Managers 16.3%
Public Investment Commission 11.9%
Directors and employees 8.1%
Old Mutual Investment Group 7.3%
Nedbank Limited 6.6%
Thesele Group 5.8%
Other 26.1%
100.0%
Number of units in issue 145,470,09
9
Number of unitholders 1,844
11. COST TO INCOME RATIO
Acucap continues to focus on
efficient asset management, and
the cost to income ratio has
remained at the low level
benchmarked by management.
Details are set out below:
six six
months months
to 30 to 30
Septemb Septemb
er 2008 er 2007
Cost category
Net direct operating costs 10,858 9,116
Property administration 8,781 3,102
fees
Asset management costs 6,402 3,337
Indirect administration 3,078 1,895
costs
Total costs 29,119 17,450
Contractual rental income 254,726 157,769
Cost to income ratio 11.4% 11.1%
Net direct operating costs 4.3% 5.8%
Property administration 3.4% 2.0%
fees
Asset management costs 2.5% 2.1%
Indirect administration 1.2% 1.2%
costs
Total costs 11.4% 11.1%
12. PROSPECTS
For the full year to March 2009,
Acucap expects to meet the
guidance given to the market of
maintaining double digit growth.
However, the forecast information
on which this statement has been
based has not been reviewed or
reported on by the company`s
auditors.
13. PAYMENT OF DEBENTURE
INTEREST
Notice is hereby given that
interim distribution number 16 of
121.3 (one hundred and twenty one
comma three) cents per linked
unit has been approved in respect
of the six month period ended 30
September 2008. The last date to
trade the linked units cum
distribution is Friday, 21
November 2008 and the record date
will be Friday, 28 November 2008.
The linked units will start
trading ex-distribution from
Monday, 24 November 2008.
Distributions will be made to
unit holders on Monday, 1
December 2008.
Linked unit certificates may not
be dematerialised or
rematerialised between Monday, 24
November 2008 and Friday, 28
November 2008 both days
inclusive.
On behalf of the Board
BS KANTOR
PA THEODOSIOU
(Chairman)
(Managing Director)
6 November 2008
Registered Office
Suite A11 Westlake Square
Westlake Drive
Westlake
CAPE TOWN
Transfer secretaries:
Computershare Investor Services
(Pty) Limited
70 Marshall Street
JOHANNESBURG
http://www.acucap.co.za
info@acucap.co.za
Share Code: ACP
ISIN: ZAE000037651
Directors: Prof BS Kantor
(Chairman), PA Theodosiou*
(Managing Director), FM Berkeley,
RC Frolich, MJ Lindeque, C B
Marlow*, S M Moloko, JH Rens*, B
Stevens, NDC Whale
* Executive
Sponsor
Java Capital (Proprietary)
Limited
Date: 06/11/2008 17:43:01 Produced by the JSE SENS Department.
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