Vukile makes R556m in distributable profit

Chief executive Laurence Rapp said Vukile did not expect a significant improvement in the operating environment in the year ahead‚ "but we have been very happy with the performance of the underlying property portfolio".

"We expect our retail component to continue to do well but the office sector to remain tough. We have a good deal pipeline and the introduction of new yield-enhancing properties will positively impact the portfolio and will be earnings enhancing." Rapp said.

The fund reported a 26.7% increase in the profit available for distribution for the full year of R556.4m.

During the period‚ 20 properties from the R1.5bn Sanlam portfolio purchase were transferred into Vukile's portfolio‚ while post year end‚ Vukile also took transfer of its 50% stake in East Rand Mall worth R1.112bn.

"Once the acquisition of East Rand Mall is taken into account‚ the portfolio value would have grown by about 44% since March 2012‚" Vukile said.

Portfolio quality

Rapp said that these acquisitions had also significantly improved the quality of the fund's portfolio‚ as was seen by a 25% increase in value per square metre since March last year.

The company expected the value of its portfolio to exceed its initial target level of R10bn once a number of property deals had been finalised‚ including the initial acquisition of four government-tenanted buildings from Encha Properties valued at R1.04bn‚ as well as the development of the Hammarsdale Shopping Centre at a cost of R194m‚ which would open in June.

Rapp said he was satisfied that Vukile had made significant strides towards its objective of growing and improving the quality of its fund with an emphasis on the retail sector‚ while maintaining its distribution growth.

The Encha deal would also boost Vukile's black economic empowerment credentials‚ he said.

Following the transaction‚ Encha will hold a material ungeared stake in Vukile "which will allow Vukile to claim a significant percentage of the ownership points in respect of the Property Sector Charter after adjusting for mandated investments"‚ Vukile said.

Vacancies across Vukile's portfolio were at 6.8% at year end‚ compared with 7.6% at the end of September last year.

Refurbishment and extension projects to the value of R117m had been completed while refurbishments worth R400m were in progress.