MD Jeffrey Wapnick said Octodec's 6.2% distribution growth to 137.3c per linked unit would have been about 11% without the dilution caused by its rights offer. Octodec raised R300m via a rights offer in August issuing 19 million new linked units at R15.85‚ which was fully subscribed.
"Importantly‚ this capital raising created a war chest for Octodec to grow its portfolio by acquiring desirable assets or for the further redevelopment of its existing properties. This contributes to the sustainability and growth of our performance for investors‚" Wapnick said.
The company's investment in IPS - an associate property company with over 50% investment in residential property - continued to deliver a positive performance with its profits earned by Octodec‚ excluding capital profits‚ increasing to R17m on the prior year.
Octodec has various projects earmarked for completion in the 2013 financial year.
These include the upgrade of the mixed-use residential property Kerk Street Building in the Johannesburg central business district. A 5‚233 square metre retail development in the Pretoria CBD will open in March 2013‚ occupied by Walmart Group's Cambridge Foods and other retailers.
But Meago investment analyst Tsana Ramatswi said coming from a low base‚ the market expected a much improved growth in distribution.
"Octodec fell short of that by returning distribution growth of 6.2%. On a total return basis over the year to end August the fund returned 27% lagging the sector's 38% over the same period. The stock could have been punished by the market for having returned negative distribution growth in 2011‚" she said.
She said Octodec vacancies had reduced from 15% to 12% highlighting management ability to convert old‚ "unlettable" properties into mixed use and residential properties.
"This works well for Octodec seeing that management pays little to nothing for vacant space‚ so when the vacancies are filled‚ this filters straight to the bottom line‚" Ramatswi said.
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