JOHANNESBURG – Investec Property Fund (IPF), a South African Real Estate Investment Trust (Reit), reported a 5.1percent increase year-on-year in its full year dividend for the year to end March, largely driven by the investment in to and the performance of the Pan European Logistics (PEL) platform.
As a result IPF declared a full-year dividend of 142.3cents a share, up from last year’s 135.4c, after the group declared a final dividend of 73.51c for the six months to end March.
“The investment was underpinned by strong property fundamentals and value has been unlocked by a dedicated, on-the-ground management team with a proven track record in the European logistics sector,” the group said.
For the year to end March 2020 it was expecting to report a dividend growth of between 3and 5percent.
The group said the performance of the PEL portfolio, together with fund’s other offshore investments, had primarily driven the 3.9percent increase in portfolio net asset value, with the PEL platform returning 26percent total return since the initial investment of 65.8million (R1047m) in May last year.
“Further investments of 10.1m were made during the year and 7.8m was invested subsequent to year end, bringing the total investment made to date to 83.7m.”
IPF investment portfolio consists of direct and indirect real estate investments in South Africa, Australia, the UK and Europe.
In South Africa, IPF said even though it achieved 0.8percent net property income growth, it remained optimistic about the long-term.
Darryl Mayers, the joint chief executive, said its focus locally remained on better extracting value from the existing portfolio.
“The challenging environment meant that we were negatively impacted by void periods and lower rental reversions.
"Despite this, however, our combination of best of breed assets and a quality on the ground management team that ensures the best possible client experience, saw vacancies decrease to 2.4percent from 4percent and 94percent of space that expired in the period was renewed or re-let,” Mayers said.
IPF’s local property portfolio consists of a diverse base of 102 quality and well-located properties with an average value per property of R169m, slightly up from R167m compared with last year.
The group said as part of the fund’s continued focus on capital recycling and allocation to ensure long-term shareholder returns, the period saw the strategic disposal of four South African properties yielding 7.1percent.
“These proceeds, together with a further R600m of South African properties that have been earmarked for sale within 12 months will further enable the fund’s capital recycling strategy,” the group said.
In Australia, the Investec Australia Property Fund (IAPF) showed a 21 percent increase in unit price.