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ACP
ACP
ACP - Acucap Properties Limited - Unaudited Interim Results for the 6 months
ended 30 September 2009
Acucap Properties
Limited
Reg no 2001/021725/06
Share Code: ACP
ISIN : ZAE 000037651
Unaudited Interim Results
for the 6 months ended 30
September 2009
30 31 March 30
September 2009 September
2009 2008
Unaudited Audited Restated
R`000 R`000 R`000
Abridged consolidated
statement of financial
position
Assets
Property Assets 5 285 227 5 360 301 5 413 964
Investment properties 4 918 966 4 857 961 4 804 269
Long term receivable 115 951 112 591 93 950
Short term receivable 19 363 17 204 22 206
Investment properties 5 054 280 4 987 756 4 920 425
and related
receivables
Investment properties - 140 578 274 124
held for sale
Investment properties 191 979 191 111 176 173
under development
Owner-occupied 10 640 10 828 10 312
property
Property development 28 328 30 028 32 930
inventory
Other non current 1 163 798 1 101 787 1 132 580
assets
Loans in respect of 256 373 248 689 222 426
unit purchase scheme
Equipment 1 572 1 687 1 361
Listed investments 684 327 612 210 662 445
Interest in subsidiaries 98 368 98 368 97 290
and jointly controlled
entities
Intangible assets 94 749 106 736 119 659
Deferred tax asset 28 409 34 097 29 399
Other current assets 210 068 169 288 163 869
Trade and other 181 662 134 748 110 919
receivables
Interest in jointly - 12 335 12 544
controlled entity
held for sale
Cash and cash 28 406 22 205 40 406
equivalents
Total assets 6 659 093 6 631 376 6 710 413
Equity and
liabilities
Shareholders` 2 093 088 2 016 960 2 134 175
interest
Share capital and 1 343 315 1 334 619 1 319 925
share premium
Non-distributable 901 893 766 244 923 822
reserve
Accumulated loss ( 152 120) ( 83 903) ( 109 572)
Non current 3 817 285 3 857 960 4 069 588
liabilities
Debentures 1 386 353 1 381 108 1 369 120
Financial liabilities 2 013 064 2 045 969 2 317 999
BEE instrument 50 694 40 421 35 284
Financial instruments 69 735 95 901 32 286
Deferred tax 297 439 294 561 314 899
liabilities
Current liabilities 748 720 756 456 506 650
Trade and other 104 562 116 183 127 691
payables
Financial liabilities 422 655 424 217 200 488
Tax payable 42 901 46 341 12 230
Debenture interest 178 602 169 715 166 241
payable
Total equity and 6 659 093 6 631 376 6 710 413
liabilities
Abridged consolidated
statement of comprehensive
income
for the 6 months ended
30 September 2009
6 months year ended 6 months
ended 31 March ended
30 2009 30
September September
2009 2008
Unaudited Audited Restated
R`000 R`000 R`000
Revenue 271 010 558 332 262 223
- Contractual 267 427 545 496 260 005
- Straight lining 3 583 12 836 2 218
Net operating expenses ( 27 684) ( 67 398) ( 30 263)
Loss on sale of ( 1 025) ( 14 500) ( 8 985)
properties
Amortisation of ( 11 957) ( 12 923) -
intangible assets
Profit before fair value
adjustments,
interest and taxation 230 344 463 511 222 975
Fair value adjustment to 593 ( 7 687) 5 085
investment properties
Fair value adjustment to 1 562 ( 20 067) ( 22 862)
government bonds
Fair value adjustment to ( 10 274) 7 835 12 972
BEE instrument
Profit before interest 222 225 443 592 218 170
and taxation
Interest income 44 257 97 533 49 225
Interest expense
- Debenture holders - ( 178 602) ( 175 220) ( 175 220)
interim
- Debenture holders - - ( 171 170) -
final
- Financial ( 110 314) ( 250 036) ( 128 200)
institutions and other
Share of (loss) of - ( 356) ( 209)
equity accounted
investees (net of income
tax)
Loss before taxation ( 22 434) ( 55 657) ( 36 234)
Taxation 1 679 ( 4 250) 2 600
Loss for the period ( 20 755) ( 59 907) ( 33 634)
Other comprehensive
income/ (expense)
Net change in fair value 62 021 ( 34 994) 7 028
of listed investments
Net change in fair value 26 166 ( 121 686) ( 58 072)
of cash flow hedge
recognised directly in
equity
Other comprehensive 88 187 ( 156 680) ( 51 044)
income/ (expense) for
the period, net of
income tax
Total comprehensive 67 432 ( 216 587) ( 84 678)
income/ (expense) for
the period
Reconciliation of loss for the period to
headline (loss)/ earnings
Loss for the period ( 20 755) ( 59 907) ( 33 634)
Fair value adjustment to ( 593) 7 687 ( 5 085)
investment properties
Profit on disposal of 1 025 14 500 8 985
investment properties
Tax effects 953 ( 3 396) 979
Headline loss - shares ( 19 371) ( 41 116) ( 28 755)
Interest paid to 178 602 346 390 175 220
debenture holders
Headline earnings - 159 232 305 274 146 465
linked units
Cents Cents Cents
Basic and diluted loss ( 15.01) ( 43.89) ( 24.89)
per share
Headline earnings per 114.74 223.64 108.39
linked unit
Interest Distribution 128.70 244.06 121.30
per linked unit
- Interim 128.70 121.30 121.30
- Final - 122.76 -
Abridged Consolidated statement of changes
in equity
for the 6 months ended 30
September 2009
Shares Share Share
issued capital Premium
Number R`000 R`000
Balance at 31 March 2008 129 049 105 129 1 211 156
Restatement of prior period - - -
due to change in accounting
policy
Restated balance at 31 March 129 049 105 129 1 211 156
2008
Total comprehensive income/
(expense) for the period
Loss for the period - - -
Other comprehensive income/
(expense)
Net change in fair value of - - -
listed investments
Net change in fair value of - - -
cash flow hedge recognised
directly in equity
Total comprehensive expense - - -
for the period
Transactions with owners,
recorded directly in equity
Issue of 8 000 000 shares in 8 000 000 8 108 632
May 2008
Proceeds - 8 108 712
Share issue costs - - ( 80)
Transfer to non-distributable - - -
reserve
Total transactions with 8 000 000 8 108 632
owners
Balance at 30 September 2008 137 049 105 137 1 319 788
Total comprehensive expense
for the period
Loss for the period - - -
Other comprehensive expenses
Net change in fair value of - - -
listed investments
Net change in fair value of - - -
cash flow hedge recognised
directly in equity
Total comprehensive expense - - -
for the period
Transactions with owners,
recorded directly in equity
Issue of 1 200 000 shares in 1 200 000 1 14 693
November 2008
Proceeds - 1 14 729
Share issue costs - - ( 36)
Transfer to non-distributable - - -
reserve
Total transactions with 1 200 000 1 14 693
owners
Balance at 31 March 2009 138 249 105 138 1 334 481
Total comprehensive income/
(expense) for the period
Loss for the period - - -
Other comprehensive income
Net change in fair value of - - -
listed investments
Net change in fair value of - - -
cash flow hedge recognised
directly in equity
Total comprehensive income/ - - -
(expense) for the period
Transactions with owners,
recorded directly in equity
Issue of 525 000 shares in 525 000 1 8 695
September 2009
Proceeds - 1 8 724
Share issue costs - - ( 29)
Transfer to non-distributable - - -
reserve
Total transactions with 525 000 1 8 695
owners
Balance at 30 September 2009 138 774 105 139 1 343 176
Abridged Consolidated statement of changes in
equity (continued)
for the 6 months ended 30
September 2009
Non Accumulated Total
Distributable loss
Reserve
R`000 R`000 R`000
Balance at 31 March 2008 988 146 ( 89 218) 2 110 213
Restatement of prior period ( 3 837) 3 837 -
due to change in accounting
policy
Restated balance at 31 March 984 309 ( 85 381) 2 110 213
2008
Total comprehensive income/
(expense) for the period
Loss for the period - ( 33 634) ( 33 634)
Other comprehensive income/
(expense)
Net change in fair value of 7 028 - 7 028
listed investments
Net change in fair value of ( 58 072) - ( 58 072)
cash flow hedge recognised
directly in equity
Total comprehensive expense ( 51 044) ( 33 634) ( 84 678)
for the period
Transactions with owners,
recorded directly in equity
Issue of 8 000 000 shares in - - 108 640
May 2008
Proceeds - - 108 720
Share issue costs - - ( 80)
Transfer to non-distributable ( 13 280) 13 280 -
reserve
Total transactions with ( 13 280) 13 280 108 640
owners
Balance at 30 September 2008 919 985 ( 105 735) 2 134 175
Total comprehensive expense
for the period
Loss for the period - ( 26 273) ( 26 273)
Other comprehensive expenses
Net change in fair value of ( 42 022) - ( 42 022)
listed investments
Net change in fair value of ( 63 614) - ( 63 614)
cash flow hedge recognised
directly in equity
Total comprehensive expense ( 105 636) ( 26 273) ( 131 909)
for the period
Transactions with owners,
recorded directly in equity
Issue of 1 200 000 shares in - - 14 694
November 2008
Proceeds - - 14 730
Share issue costs - - ( 36)
Transfer to non-distributable ( 48 105) 48 105 -
reserve
Total transactions with ( 48 105) 48 105 14 694
owners
Balance at 31 March 2009 766 244 ( 83 903) 2 016 960
Total comprehensive income/
(expense) for the period
Loss for the period - ( 20 755) ( 20 755)
Other comprehensive income
Net change in fair value of 62 021 - 62 021
listed investments
Net change in fair value of 26 166 - 26 166
cash flow hedge recognised
directly in equity
Total comprehensive income/ 88 187 ( 20 755) 67 432
(expense) for the period
Transactions with owners,
recorded directly in equity
Issue of 525 000 shares in - - 8 696
September 2009
Proceeds - - 8 725
Share issue costs - - ( 29)
Transfer to non-distributable 47 462 ( 47 462) -
reserve
Total transactions with 47 462 ( 47 462) 8 696
owners
Balance at 30 September 2009 901 893 ( 152 120) 2 093 088
Abridged Cash flow statement
for the 6 months ended 30
September 2009
6 months year ended 6 months
ended 31 March ended
30 September 2009 30 September
2009 2008
R`000 R`000 R`000
Cash flows from operating
activities
Cash generated by operations 181 385 427 975 217 664
Income tax (paid)/ refunded ( 3 291) 9 516 ( 1 321)
Interest received 44 257 97 533 47 333
Interest paid ( 280 029) ( 571 556) ( 282 861)
Net cash outflows from ( 57 678) ( 36 532) ( 19 185)
operating activities
Cash inflows / (outflows) 82 843 4 989 ( 13 249)
from investing activities
Cash (outflows)/ inflows from ( 18 964) 41 495 59 888
financing activities
Net cash inflows for the 6 201 9 952 27 454
period
Cash and cash equivalents at 22 205 12 253 13 110
beginning of period
Cash and cash equivalents at 28 406 22 205 40 564
end of period
Segmental results
for the 6 months ended 30 September 2009
6 months 6 months
ended ended
30 30
September September
2009 2008
Restated
R`000 R`000
Retail Segment revenue (external 167 745 162 749
customers)
Net operating expenses ( 20 389) ( 13 834)
Fair value adjustment to ( 1 951) 1 097
investment properties
Loss on disposal of ( 160) -
investment properties
Segmental results 145 245 150 012
Offices Segment revenue (external 72 089 86 566
customers)
Net operating expenses ( 2 515) ( 4 088)
Fair value adjustment to ( 446) 3 955
investment properties
Loss on disposal of ( 865) ( 8 194)
investment properties
Segmental results 68 263 78 239
Industrial Segment revenue (external 6 774 6 583
customers)
Net operating expenses ( 320) ( 493)
Fair value adjustment to 2 990 33
investment properties
Loss on disposal of - ( 791)
investment properties
Segmental results 9 444 5 332
Property Segment revenue (external 24 402 6 325
development customers)
Net operating expenses ( 11 070) ( 1 324)
Segmental results 13 332 5 001
Reconciliation to profit before interest and taxation for the period
in the income statement
Revenue 271 010 262 223
Allocated operating ( 34 294) ( 19 739)
expenses
Unallocated operating 6 610 ( 10 524)
expenses
Loss on disposal of ( 1 025) ( 8 985)
investment properties
Amortisation of intangible ( 11 957) -
assets
Fair value adjustment to 593 5 085
investment properties
Fair value adjustment to 1 562 ( 22 862)
government bonds
Fair value adjustment to ( 10 274) 12 972
BEE instrument
Profit before interest and 222 225 218 170
taxation
BASIS OF PREPARATION
The financial statements 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 annual financial statements.
COMMENTARY
1. REVIEW OF RESULTS AND OPERATIONS
The directors of Acucap are pleased to report a distribution of 128.7
cents per linked unit for the six months ended 30 September 2009. This
represents a 6.1% increase compared to the same period last year, a
result achieved under difficult economic conditions. The recovery of the
South African economy has been delayed, and this has placed pressure on
businesses across the retail, commercial and industrial sectors.
Nonetheless, Acucap`s high quality property portfolio delivered a sound
performance, once again showing defensive strength. There was a lower
contribution from development profits compared with the same period last
year, but income from Acucap`s investment in Sycom showed pleasing growth
as this source of income gradually increases to replace the diminishing
profits from our development activity.
No buildings were sold in the period under review, but Acucap was pleased
to acquire the remaining 50% of the Bayside Shopping Centre, announced in
May 2009. Transfer took place on 16 October 2009, and Acucap now owns the
whole property, which it plans to expand based on strong tenant demand in
the area. The acquisition and planned extension of the centre will help
to diversify Acucap`s retail portfolio, both geographically in terms of
an increased Cape representation, and in terms of reducing the
concentration of retail income, presently dominated by Festival Mall and
Key West.
On the basis of individual assets and asset segments, Acucap`s net income
is attributable as follows :
Contractual % of Net % of
rental total property total
income income
R 000`s R 000`s
Festival 19.9% 19.4%
Mall 48,420 42,734
Key West 11.3% 11.5%
27,364 25,315
Other 37.0% 35.2%
retail 90,010 77,356
Offices 29.5% 31.5%
71,643 69,128
Industrial 2.3% 2.4%
5,588 5,268
100.0% 100.0%
243,025 219,801
2. SIMPLIFIED FINANCIAL INFORMATION
Consistent with previous results announcements, a simplified distribution
income statement is presented below.
Simplified distribution income statement for the six months ended 30
September 2009
6 months to year to 31
30 March
September
2009 2009
Note R`000 R`000
Revenue 1 243,025 499,180
Net operating expenses 2 -28,681 -56,114
Profit before interest and taxation 214,344 443,066
Income from investment in Sycom 5 13,879 8,010
Property Fund Managers
Development profits 6 17,617 41,823
Interest received 10 7,117 14,821
Income from Listed Investments 10 28,959 56,631
Interest received on Unit Purchase 10 9,121 16,508
Trust
Notional Interest received on units 10 547 13,250
issued
Debenture holders interest paid - 11 0 -186,890
interim
Other interest paid 12 -102,140 -227,166
Profit for the period 189,444 180,053
Final distribution per unit
128.70 122.76
Notes to the simplified distribution
income statement
1 Revenue as stated 271,010 558,332
Less : straight lining revenue -3,583 -12,836
reversed
Less : Helderberg sales -24,402 -46,316
243,025 499,180
2 Net operating expenses as stated -27,684 -67,398
Less : Net income from Sycom Property -13,879 -8,010
Fund Managers
Add : CShell expenses 51 97
Less : Helderberg cost of sales
12,831 19,197
-28,681 -56,114
3 (Loss) / Profit on sale of properties -1,025 -14,500
as stated
Non-distributable capital profit / 1,025 14,500
loss reversed
0 0
4 Amortisation of Intangible Assets as -11,957 -12,923
stated
Reversal of amortisation of 11,957 12,923
intangible asset
0 0
5 Income from Sycom Property Fund
transferred from net operating 13,879 8,010
expenses
13,879 8,010
6 Helderberg sales transferred from 24,402 46,316
Revenue
Helderberg cost of sales transferred -12,831 -19,197
from expenses
Helderberg units sold not yet 13,097 -
transferred - Sept-09
Helderberg units sold not yet -14,704 14,704
transferred - Mar-09
Realised profit on sale of 7,653 -
developments
17,617 41,823
7 Fair value adjustment to investment 593 -7,687
properties
Less: Fair value adjustment to -593 7,687
investment properties reversed
0 0
8 Fair value adjustment to BEE -10,274 7,835
instrument
Less: Fair value adjustment to BEE 10,274 -7,835
instrument reversed
0 0
9 Fair value adjustment to Government 1,562 -20,067
bonds
Less: Fair value adjustment to -1,562 20,067
government bonds reversed
0 0
10 Interest received as stated 44,257 97,533
Add : Interest received from CShell, 1,487 3,677
previously eliminated on
consolidation
Less : Income received on listed -28,959 -56,631
units separately disclosed
Less : Interest received on Unit -9,121 -16,508
Purchase Trust separately disclosed
Less : Notional Interest received on -547 -13,250
units issued separately disclosed
7,117 14,821
11 Debenture interest paid as stated -178,602 -346,390
Reverse debenture interest as stated 178,602 346,390
Notional interest iro Mar-08 final -8,979
distribution on units issued in May-
08
Interim debenture interest to 30 -177,911
September 2008
0 -186,890
12 Other interest paid as stated -110,314 -250,036
Less : Other interest paid by CShell, 9,399 22,062
previously inculded on consolidation
Less : Net reversal of interest -1,225 808
provided from period end to
distribution payment date
-102,140 -227,166
13 Number of linked units in issue per 138,774,105 138,249,105
IFRS at 31 March 2009
CShell linked units previously 8,420,994 8,420,994
treated as treasury units on
consolidation
Actual units in issue 147,195,099 146,670,099
Simplified Balance Sheet at 30
September 2009
30-Sep-09 31-Mar-09
R`000 R`000
Assets
Property assets 14 5,256,899 5,189,695
Listed property investments 15 713,286 641,958
Other non-current assets 16 479,471 489,577
Other current assets 17 250,355 211,105
Total assets 6,700,011 6,532,335
Equity and liabilities
Shareholder`s interest 18 3,903,379 3,812,238
Non-current liabilities 19 2,461,148 2,379,326
Current liabilities 20 335,484 340,771
Total equity and liabilities 6,700,011 6,532,335
Notes to the simplified balance sheet
14 Property assets as stated 5,285,227 5,360,301
Less : Properties held for sale, - -140,578
removed from assets
Less : Helderberg property inventory -28,328 -30,028
5,256,899 5,189,695
15 Listed Sycom investment transferrd 684,327 1,101,787
from non-current assets
Listed Sycom investment transferrd 28,959 -612,210
from current assets
Listed property investments 713,286 489,577
16 Other non-current assets as stated 1,163,798 1,101,787
Less: Listed property investments -684,327 -612,210
disclosed separately
479,471 489,577
17 Other current assets as stated 210,068 169,288
Add: CShell intercompany loan 27,821 26,834
eliminated on consolidation
Add : Helderberg property inventory 28,328 30,028
Less : Sycom interest receivable -28,959 -29,748
Less : Helderberg property sales not 21,389 23,981
yet transferred
Less : Helderberg property sold not -8,292 -9,278
yet transferred cost of sales
250,355 211,105
18 Shareholder`s interest as stated 2,093,088 2,016,960
Add Debentures 1,386,353 1,381,108
Debenture portion of linked 84,126 84,126
units issued to CShell
Share capital and premium on 109,530 109,530
shares issued to CShell
CShell retained income / NDR 64,327 53,538
Helderberg property sales not 13,097 14,703
yet transferred net income
Adjust deferred tax to the 152,858 152,273
Capital Gains Tax rate
3,903,379 3,812,238
19 Non-current liabilities as stated 3,817,285 3,857,960
Re-classification of current 422,655 424,217
financial liabilities
Less:
Proceeds from disposal of - -140,578
assets classified as held for sale
Adjust deferred tax to the -152,858 -152,273
Capital Gains Tax rate
Debentures -1,386,353 -1,381,108
Financial liabilities -183,736 -183,736
attributable to CShell
Financial instrument CShell -5,151 -4,735
SWAP
Reversal of BEE financial -50,694 -40,421
instrument
2,461,148 2,379,326
20 Current liabilities as stated 748,720 756,456
Add: Debenture interest payable to 10,838 10,338
CShell
Less: Re-classification of current -422,655 -424,217
financial liabilities
Accrued interest receivable -1,419 -1,806
from CShell
335,484 340,771
3. SYCOM
Acucap has been managing Sycom for the last year, a period of strong
growth in Sycom`s distributions. In the six months to 31 March 2009,
distributions grew by 11.1% and in the six months to 30 Sptember 2009 by
9.2%. These sound results emphasise the high quality of the Sycom
property portfolio, and confirm Acucap`s rationale for entering into this
transaction. In addition to receiving good distribution growth from its
holding in Sycom, Acucap has also achieved a higher than expected return
on its investment in Sycom Property Fund Managers (`SPFM`), which manages
Sycom.
Having established its position in Sycom, and with an intimate
understanding of the fund`s assets, Acucap`s intention remains to merge
the two businesses, creating a single fund that is both large and of high
quality, with a small number of properties, enabling Acucap to maintain
its intensive approach to the management of its property assets. Hyprop
still retains a material investment in Sycom as a unit holder, and
discussions are continuing between the parties to find a satisfactory
resolution of their joint interest in Sycom.
4. HELDERBERG VILLAGE
A total of 6 units were sold in the six months under review, compared
with 9 sold in the same period last year. A further 3 units are budgeted
for sale in the remaining 6 months of the current financial year. The
forecast for the 2011 financial year includes the sale of the final 8
units.
5. DEVELOPMENTS WITHIN THE PROPERTY PORTFOLIO
Retail portfolio
Turnovers across the retail portfolio grew by 0.3% for the six months
ended 30 September 2009 compared with the same period last year, whilst
footcounts declined by 3.4% over the same period. To a degree, these
results are symptomatic of the weak state of the local economy, although
extensive re-development activities at four of Acucap`s retail centres
has also detracted from turnover growth. Development activities in the
retail portfolio are summarised below:
Rondebosch on Main Shopping Centre
This project reached final completion during the period under
review, and Pick `n Pay has also completed its upgrade of the store.
The centre is trading well, and the new structured parking is making
a positive contribution to the successful operation of this popular
community centre.
Westville Mall
The refurbishment of this centre is due for completion in December
2009. The malls have been re-tiled, shop fronts renewed, the
building elevation modernised, and a number of the shops extended
towards the main car park to add 650m2 of GLA. The development will
yield a net return of 9.6%. Planning is underway to add structured
parking to this well patronised and busy centre.
Howard Centre
Work has commenced on a R44m project to refurbish, reconfigure and
re-mix the tenancy at this community centre. The work includes an
expansion of Woolworths from 1,100m2 to a fuller offering of
2,000m2, expanding the banking component, and introducing Mr Price
to the fashion mix.. Howard Centre has for many years been
Pinelands` main community centre, and this project is intended to
refresh the product, and improve its community appeal and offering.
It expected to yield a net return of 10.1%
Watermeyer Park
Work is nearing completion on an upgrade and refurbishment of this
centre.
Office Portfolio
There were no acquisitions or disposals in the office portfolio, although
the transfer was effected for Goldfields and 135 West Street, both of
which had been shown as `held for sale ` at 31 March 2009. The principal
leasing activity is shown below :
Neotel Woodmead
Neotel vacated this building at the end of August 2009, and their
entire space of 4,618m2 was re-let to Online Digital Media, with the
lease commencing in September 2009.
Industrial portfolio
N1 Business Park, Midrand
The latest two developments in the Park have been completed and
handed over to the tenants. Landis & Gyr, with 4 600m2, have signed
a 10 year lease that gives an initial return 10.34%, and Digistics,
with a 5 year lease for 7 821m2, provides an initial return 10.33%.
Development prospects have cooled with the slowing economy. The
project infrastructure, however, is progressing on schedule, and the
latest phase of roads and landscaping to cater for the most recent
developments has now been completed.
To date, 25,479m2 of warehouse space has been leased. 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, long lease tenure and a strong tenant
base.
6. BORROWINGS
The company has fixed the interest rate on 73.8% (2008:68%) of its
facilities with unexpired terms up to 15 years. The weighted average rate
for interest rate swaps is 10.9%, and the weighted average term to
maturity is 71/2 years. Details are as follows :
ACUCAP - INTEREST RATE PROFILE
Fixed Amount Effective
period interest
rate
R`000
Standard 01-Oct-09 11.4%
50,000
Nedbank 27-Sep-11 10.3%
50,000
Standard 01-Oct-11 10.2%
50,000
Omsfin 15-Dec-11 9.7%
50,000
Nedbank 31-Mar-12 13.2%
50,000
Standard 01-Oct-12 10.1%
50,000
Nedbank 08-Feb-13 11.2%
200,000
Standard 01-Oct-13 9.8%
50,000
Omsfin 11-Oct-13 10.0%
120,000
Nedbank 01-Aug-16 11.2%
70,000
Nedbank 30-Sep-16 10.7%
50,000
Nedbank 31-Jul-17 10.9%
50,000
Nedbank 17-Jul-19 11.6%
50,000
Nedbank 31-Jul-20 11.1%
50,000
Nedbank 05-Aug-20 10.9%
50,000
Nedbank 30-Sep-20 10.4%
50,000
Nedbank 31-May-21 11.7%
250,000
Nedbank 31-Jul-23 10.9%
50,000
Nedbank 09-Oct-23 10.0%
100,000
Bond shorts R186/R209 2025/2036 9.2%
222,655
Fixed interest loans
1,662,655
Floating interest
loans 589,328
Nedbank 8.20%
63,303
Nedbank 9.50%
30,025
Omsfin 8.50%
200,000
Standard 8.50%
180,000
Standard 8.68%
116,000
Total borrowings (excluding BEE)
2,251,983
# Short position on R186 and R209 Government Bonds
7. LEASE EXPIRY, THROUGH RENTAL AND ESCALATION DATA
The forward lease expiry profile of the Acucap, portfolios is detailed
below, categorized as to major retail assets (namely Festival Mall, Key
West, Gardens Centre, Bayside Mall (50%), and The Bridge (28%)), other
retail assets and offices. It provides a comprehensive profile of all
contractual lease expiries :
FORWARD LEASE EXPIRY
PROFILE BY INCOME
Total Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
+
MAJOR RETAIL
ASSETS
Expiry (% of 43.8% 8.5% 9.0% 11.1% 5.4% 3.6% 3.1% 3.2%
total
income)
National 26.6% 5.3% 3.9% 7.1% 2.5% 2.8% 2.5% 2.5%
tenants
Other 17.2% 3.2% 5.1% 4.0% 2.9% 0.7% 0.6% 0.7%
Average rate
mSquared 95.48 96.49 107.46 122.54 114.97 92.44 63.93 50.93
National
tenants 79.36 79.36 92.48 103.00 95.40 80.33 57.58 47.41
Other
139.44 149.72 122.90 185.01 139.51 223.38 123.53 69.02
Average 8.1% 8.4% 8.5% 8.6% 8.2% 7.7% 6.3% 6.6%
escalation
rate
National 7.5% 7.9% 7.5% 8.3% 7.3% 7.2% 5.9% 6.9%
tenants
Other 9.0% 9.2% 9.2% 9.3% 9.0% 9.5% 8.0% 5.7%
OTHER RETAIL
ASSETS
Expiry (% of 23.6% 2.8% 3.0% 3.0% 5.1% 2.8% 3.9% 2.9%
total
income)
National 13.6% 1.4% 1.3% 0.8% 2.8% 1.9% 3.6% 1.8%
tenants
Other 10.0% 1.4% 1.7% 2.2% 2.3% 0.9% 0.3% 1.2%
Average rate
mSquared 83.34 116.56 88.39 107.46 122.97 69.92 51.89 73.67
National
tenants 67.14 100.88 62.08 88.99 107.50 62.17 48.89 62.96
Other
123.75 136.84 133.17 116.50 149.12 97.13 140.60 98.13
Average 7.4% 8.8% 7.6% 8.5% 8.4% 7.9% 4.4% 6.8%
escalation
rate
National 6.3% 8.1% 5.6% 7.3% 8.0% 7.4% 4.0% 6.0%
tenants
Other 8.9% 9.5% 9.1% 9.0% 8.8% 8.9% 9.4% 8.0%
OFFICES
Expiry (% of 30.0% 1.7% 3.2% 4.8% 5.1% 8.3% 2.3% 4.6%
total
income)
Large 16.8% 0.2% 1.5% 3.0% 2.5% 3.9% 2.2% 3.4%
corporates &
government
Other 13.2% 1.5% 1.7% 1.8% 2.6% 4.3% 0.1% 1.2%
Average rate
mSquared 112.34 110.75 107.10 112.80 117.76 117.84 111.61 102.55
Large
corporates & 108.38 206.48 96.75 118.78 110.93 108.96 111.34 99.66
government
Other
117.81 105.05 118.22 104.11 125.08 127.29 118.02 112.08
Average 8.8% 9.0% 9.1% 9.3% 9.4% 8.8% 8.0% 7.9%
escalation
rate
Large 8.7% 8.6% 9.7% 9.4% 9.9% 8.7% 8.0% 7.2%
corporates &
government
Other 9.0% 9.1% 8.7% 9.3% 9.0% 8.8% 8.0% 10.0%
INDUSTRIAL
ASSETS
Expiry (% of 2.6% 0.0% 0.1% 0.0% 0.0% 0.1% 1.4% 0.9%
total
income)
National 1.7% 0.0% 0.1% 0.0% 0.0% 0.0% 1.1% 0.4%
tenants
Other 0.9% 0.0% 0.0% 0.0% 0.0% 0.1% 0.2% 0.5%
Average rate - -
mSquared 46.47 62.16 10.00 66.19 43.48 50.78
National - - - -
tenants 45.19 62.16 41.22 54.64
Other - - -
49.00 10.00 66.19 58.60 48.06
Average 7.8% - 9.0% - 10.0% 8.0% 7.5% 8.0%
escalation
rate
National 7.4% - 9.0% - - - 7.0% 8.1%
tenants
Other 8.6% - - - 10.0% 8.0% 10.0% 8.0%
TOTAL
Expiry (% of 100.0% 13.0% 15.4% 18.9% 15.5% 14.8% 10.7% 11.7%
total
income)
National 58.7% 6.8% 6.9% 10.9% 7.7% 8.7% 9.4% 8.1%
tenants
Other 41.3% 6.1% 8.5% 8.0% 7.8% 6.1% 1.3% 3.6%
Average rate
mSquared 90.86 101.99 102.42 117.31 116.99 97.89 60.80 70.34
National
tenants 80.40 84.29 84.52 105.61 104.29 84.88 57.58 66.10
Other
123.33 133.15 123.80 138.17 133.09 125.61 104.57 82.21
Average 8.2% 8.6% 8.4% 8.8% 8.7% 8.3% 6.2% 7.3%
escalation
rate
National 7.6% 8.0% 7.6% 8.5% 8.4% 7.9% 5.8% 6.9%
tenants
Other 9.0% 9.3% 9.1% 9.2% 9.0% 8.9% 8.8% 8.2%
SUMMARY OF
PORTFOLIO GROSS
LETTABLE AREA
Total GLA Leased Vacant Vacancy %
Major retail 179,422 174,827 4,595 2.6%
Other retail 116,790 108,183 8,607 7.4%
Offices 106,375 101,823 4,552 4.3%
Industrial 21,321 276 1.3%
21,597
TOTAL 424,184 406,154 18,030 4.3%
Approximately 7,520mSquared of the vacancy in `other retail` consists of
planned vacancies in Westville Mall, Howard Centre, East Rand Value Mall,
and Watermeyer Park, where redevelopments are either under way or are
planned to commence shortly. Excluding the effects of such activities,
the `other retail` vacancy would decline to under 1%, and total vacancy
to 2.5%, from 2.8% at 31 March 2009.
By March 2010, the total vacancy is expected to once again be under 3% as
retail development activities reach completion.
8. RETAIL PORTFOLIO PERFORMANCE
As noted under section 5 above, the retail portfolio showed fairly static
turnover numbers in the six months to 30 September 2009, although the
results for the Acucap portfolio were substantially better than the
Statistics SA national average for retail sales growth. The chart below
shows turnover contribution within Acucap`s retail portfolio, reported by
retail segment. There has been little change in the segmental
contribution to total retail turnovers in the Acucap portfolio, with the
food majors accounting for an additional 1.2%, health and beauty an
additional 0.8%, and the contribution from mass discounters declining by
1% as the sale of durable goods remains under pressure.
Food majors 41.5%
Apparel 26.5%
Home & Furniture 2.5%
Electronics & 3.6%
Music
Mass Discounters 6.2%
Health & Beauty 9.2%
Food, Service & 6.8%
Entertainment
Other 3.7%
100.0%
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 2009 to 30
September 2009 :
Expiries and Average Average New Average Average
terminations through escalation leases through escalation
(m2) rent at rate at and rent for for new
expiry expiry renewals new leases
(R) (m2) leases
(R)
Regional 13,032 100.89 8.0% 10,939 105.89 8.2%
Retail
Other 19,584 82.51 8.8% 17,794 82.57 8.3%
retail
Offices 17,297 89.10 9.6% 16,062 94.37 9.2%
Industrial 2,484 56.22 10.0%
Total 49,913 47,279
Renewal rentals for regional retail and offices showed upward reversion
of 5% and 5.7% respectively, whilst renewal rentals for other retail were
flat. Renewal escalation rates have not changed significantly across the
whole portfolio.
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 and New Area GLA at 30
31 terminations leases added September
March and 2009
2009 renewals
Total 421,106 (44,201) 44,201 3,078 424,184
- 408,860 (49,913) 44,201 3,006 406,154
leased
- 12,246 5,712 18,030
vacant 72
10. UNITHOLDERS
A table of Acucap`s major unit holders is set out below :
Acucap unitholders at 30 September 2009
Entities controlling > 5% of
issued units
Coronation Fund Managers 15.73%
Public Investment 14.17%
Commission
Stanlib Asset Managers 13.17%
Directors and employees 9.30%
Nedbank Limited 6.49%
Thesele Group 5.72%
Investec 5.67%
Other 29.75%
100.00%
Number of units in issue 147,195,099
Number of unitholders
2,204
Subsequent to the end of the period under review, Acucap successfully
placed 9.7m linked units, raising R280m for the acquisition of the
remaining 50% of Bayside Mall.
11. COST TO INCOME RATIO
For the year to date, management has devoted considerable attention to
cost control, particularly in view of the dramatic increases in
administered prices such as electricity and rates. The net cost to income
ratio has remained satisfactorily low, as shown in the table, and the
rate of operating cost recovery from tenants has been maintained.
Period Percentage
6 months to 30 Sept 11.8%
2009
Year to 31 March 2009 11.3%
Year to 31 March 2008 14.2%
Year to 31 March 2007 12.6%
Year to 31 March 2006 12.2%
Year to 31 March 2005 12.7%
In the office portfolio, electricity contributes an average R7.18 per m2
to tenant`s cost of occupancy, and in the retail portfolio, occupancy
costs include an average R11.40 per m2 for electricity. The board is
concerned about the effect of electricity price increases on tenant`s
cost of occupation, and on their ability to afford rental increases over
time.
12. PROSPECTS
With strong upward rental reversions coming through at Festival Mall and
Key West in the current renewal cycle, and with the Rondebosch and
Westville developments making an increased contribution to second half
income, the board of Acucap expects second half growth to exceed that of
the first half, resulting in a full year distribution growth rate in the
order of 6.5% to 7%. This guidance excludes the effects of any unforeseen
circumstances, and the forecast information on which this statement is
based has not been reviewed or reported on by Acucap`s auditors.
13. PAYMENT OF DEBENTURE INTEREST
Notice is hereby given that interim distribution number 18 of 128.7 (one
hundred and twenty eight comma seven) cents per linked unit has been
approved in respect of the six month period ended 30 September 2009. The
last date to trade the units cum distribution is Friday, 27 November 2009
and the record date will be Friday, 4 December 2009. The units will start
trading ex-distribution from Monday 30 November 2009. Distributions will
be made to unit holders on Monday 7 December 2009.
Unit certificates may not be dematerialised or rematerialised between
Monday 30 November and Friday 4 December 2009 both days inclusive.
On behalf of the Board
BS KANTOR PA THEODOSIOU
(Chairman) (Managing Director)
13 November 2009
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 : ZAE 000037651
Directors: Prof BS Kantor (Chairman), PA Theodosiou*# (Managing Director), FM
Berkeley, RC Frolich, CB Marlow*, SM Moloko, N Mandindi, JH Rens*, B
Stevens, NDC Whale
* Executive; # British
Date: 13/11/2009 12:52:28 Produced by the JSE SENS Department.
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