Synergy Income Fund B linked units distribution growth 75%

27 Aug 2013

Synergy Income Fund (SGA‚ SGB) on Monday reported 5% distribution growth for its A linked units to 82.66c per unit‚ and 78% distribution growth for B linked units to 51.38c per unit for the year ended June.

Synergy‚ which is a specialised retail property fund‚ had a property portfolio as at 30 June which consisted of 14 properties with a total market value of R1.877bn.

An agreement to acquire Atlantis City Shopping Centre‚ with effect from 1 September‚ was concluded during the year and would increase the market value of total property assets in the Synergy portfolio to R2.231bn.

The fund has separately listed A and B linked units‚ each offering investors a different risk and reward profile. The A linked units have a preferential entitlement to distributions that escalate at 5% annually until 30 June 2017‚ and thereafter at the lower of 5% or consumer price inflation. The remaining distributable income‚ after payment of distributions to A linked unitholders‚ accrues to B linked unitholders.

Synergy's distribution per A linked unit was 42.34c for the six months ended June‚ while the distribution per B linked unit was 26.63c for the period.

Combined with the interim distribution of 40.32c per A linked unit and 24.75c per B linked unit‚ this gives an annual distribution of 82.66c per A linked unit and 51.38c per B linked unit.

This result was in line with the company's forecasts released in 2012.

At 30 June‚ retail vacancies were 3.3% of retail gross lettable area‚ compared with 4.6% in the previous year.

Rental reversions across the portfolio "have trended upwards by 6.9% and a tenant retention ratio of 88% was achieved during the year under review".

Synergy said its "strong leasing performance" had been driven by targeting the underlet components of the portfolio.

"The board expects Synergy's B linked unit distributions for 2014 to increase by between 12% and 16% compared to 2013‚" Synergy said.

Source: I-Net Bridge

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