| Thu 24 Aug 2006, 17:51 | | Martprop - Confident Of Growing Income As Portfoli |
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Martprop - Confident Of Growing Income As Portfolio Delivers In Second Half
Martprop Property Fund
("Martprop")
A Collective Investment Scheme in property registered in terms of the
Collective
Investment Schemes Control Act, No. 45 of 2002 and managed by Marriott
Property
Fund Managers Limited (Registration number 1994/009895/06)
JSE Share code: MTP & ISIN: ZAE000037271
Martprop Property Fund"s distributable income of R97,9 million for the
second half of the year to July 31 2006, reflected the much improved
performance from the fund"s property portfolio. This distribution, equating
to 13,5 cents a unit, was 8% higher than the interim payment for the six
months to January 31.
The fund said today it was confident that unitholders can expect
distributions to grow in line with sector expectations in the years ahead.
To be renamed SA Corporate Real Estate Fund in October, Martprop also
reshaped its portfolio during the year. It sold properties for R36,6 million
and acquired industrial, office and retail properties, at yields ranging
from 9,4% to 11,3%, for R302 million. Investments totalling R104 million in
two new retail developments, Umlazi Mega City in Durban and Highland Mews in
Witbank, generated income yields of 11,4% and 10,5%, ahead of that expected
on a direct investment basis.
Managing director Roger Perkin said the improved performance signalled the
end of the negative rental reversions which had constrained earnings and
distribution growth in recent years. Rental growth attributable to the core
portfolio had been sustained by strong underlying property fundamentals.
"The negative rental reversions of two significant leases did impact on the
second six months, but the balance of the portfolio performed very well to
deliver this overall growth."
Vacancies of 1,5% in the R2,6 billion portfolio indicated a strong demand
for good quality, well located assets. During the year the fund concluded
leases to a value of R404 million and recorded a retention of 83% of all
leases that expired in that period.
Perkin said the fund"s 100 industrial properties, 63% of the portfolio,
accounted for R143,7 million of the net property income, retail, 28% of the
portfolio, contributed R63,2 million, and offices, 9% of the portfolio,
contributed R19,3 million.
The portfolio outperformed both the listed fund benchmark and the Investment
Property Databank (IPD) universe benchmark for 2005, with a total return of
34,4% against the universe return of 28,8%. The fund"s industrial
properties delivered a total return of 40,5%, underpinning the portfolio"s
strong performance against the benchmark.
Perkin said the fund"s net asset value had increased to 287 cents a unit
from 258 cents a unit a year ago. Borrowings of R538 million, 21% of the
value of the portfolio, were relatively low and attracted interest of an
exceptionally competitive rate of prime less 2,3%.
Looking ahead, he said property fundamentals remained strong. The portfolio
was well positioned for rental growth and there was a strong pipeline of
investment opportunities.
"The properties acquired during the year are well let to national tenants
and offer sound income growth for unitholders in the long term. Umlazi Mega
City and Highland Mews will contribute positively to rental earnings and
growth in the fund. "
Martprop will take transfer in September of two Gauteng properties, acquired
for R65 million. These were offices leased to ABSA Bank Limited and an
industrial property leased to Nampak Ltd.
The completion of a R70,9 million distribution and warehousing complex for
the Fuel Group in the Western Cape at the end of August would generate an
initial yield of 10,25%.
Perkin said the pending change in name to SA Corporate Real Estate Fund
identified with its new direction as it pursued active expansion and
positioned itself to attract significant domestic and foreign equity
investment. The change follows the acquisition of the fund"s management
company by Old Mutual Property Group.
ends
Date: 24/08/2006 05:51:25 PM Produced by the JSE SENS Department
