| Mon 24 May 2010, 12:16 | | VKE - Vukile Property Fund Limited - Vukile rides above recession to post robust |
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VKE
VKE
VKE - Vukile Property Fund Limited - Vukile rides above recession to post robust
results
VUKILE PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Reg no. 2002/027194/06)
ISIN: ZAE000056370
JSE code: VKE
NSX code: VKN
("Vukile" or "the company")
VUKILE RIDES ABOVE RECESSION TO POST ROBUST RESULTS
Johannesburg, 24 May 2010 - Property loan stock company Vukile today posted an
11.5% increase to R323.3 million in net profit available for distribution for
the full year to 31 March and posted a 13.2% rise to 60.9 cents per linked unit
in the distribution for the second six month period of the financial year,
making the total for the year 107.90 cents per linked unit, an increase of 10.2%
over the previous year.
The distribution for the second six month period of the financial year was
enhanced by a once-off saving of R10 million in distributions payable to Sanlam
Properties, which were negotiated and agreed to be waived as part of the
agreement regarding the acquisition of the property asset management business
concluded in December 2009.
Chief executive Gerhard van Zyl said the robust results were significant given
the tough trading environment in which they were achieved. "During the year,
the property sector had to deal with rising vacancies, increased bad debts,
increased arrears and lower rental growth. Vukile did exceptionally well to
contain vacancies at 4.1% of gross rentals (2009: 3.2%), while improving its
recurring cost to property revenue ratio, excluding electricity and rates &
taxes costs, from 16.7% to 16.5%." New leases and renewals of 194 813mSquared
with a contract value of R364 million were also concluded during the year, while
67% of leases that expired, were renewed.
A highlight of the year was the successful acquisition from Sanlam Properties of
the asset management business relating to the Sanlam property portfolio. Vukile
is now responsible for rendering property asset management services to Sanlam
Life`s entire property portfolio. This is in addition to the property asset
management services of its own properties, which was internalised in October
2009. In addition, Vukile is in the process of acquiring a portfolio of nine
properties from Sanlam Life for R527 million, subject to certain conditions
precedent, and has a call option to acquire additional properties from Sanlam
Life for R500 million as well as a right of first refusal in respect of the
remainder of Sanlam Life`s property portfolio.
Van Zyl said the successful acquisition of the property asset management
business as well as the proposed acquisition of the high quality property
portfolio from Sanlam Life provided the company with a solid platform for the
next stage of the company`s growth, as did the prospect of future acquisitions
stemming from the option to acquire a R500 million property portfolio from
Sanlam and the right of first refusal over the remainder of Sanlam`s properties.
Looking ahead, van Zyl said that market conditions would remain tough in the
near future. "There are signs that the economy has turned the corner and the
expectation is now that we could see growth in GDP of 2% to 3% for the 2010
calendar year. On the other hand, the property cycle lags the broader economy
by 12 to 18 months and we therefore expect vacancies to increase further from
current levels and growth in rentals to remain weak." In addition, the saving
of R10 million in distributions not paid to Sanlam Properties would not be
repeated.
"However, we will see the full effect of the newly acquired property asset
management business as well as the benefit of an enlarged property portfolio,
which should enable us to achieve reasonable growth in distributions for the
2011 financial year."
For further information contact 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 Helen McKane Tel : +27 11 728 4701, Fax: +27 11 728 2547, Mobile:
082 330 2034 or e-mail: vukile@dpapr.com
www.vukileprops.co.za
Date: 24/05/2010 12:16:01 Produced by the JSE SENS Department.
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