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SA Corporate Real Estate Fund posts 7.3% rise in distribution

28 Aug 2013

SA Corporate Real Estate Fund on Monday (26 August) reported a 7.3% year-on-year growth in distributions to 16.28c per unit for the six months to June.

SA Corporate Real Estate Fund posts 7.3% rise in distribution

The listed property unit trust‚ whose real estate investment trust (Reit) status will come into effect in January next year‚ owns a portfolio of retail‚ industrial and commercial buildings located mainly in SA's major metropolitan areas.

The fund said its industrial rental growth of 7.3% was underpinned by positive rental reversions and good tenant retentions of 65.1%.

Meanwhile‚ retail rental income decreased by 15.3%‚ which was caused by a combination of the effect of sales in 2012 and 2013‚ and a 1.3% increase in vacancies.

Retail rental income on the existing portfolio improved from 4.7% in June last year to 6.2% in June this year.

Commercial rental income decreased by 11.7%‚ as a result of a combination of the impact of buildings sold and a 5.4% increase in vacancies relative to the comparable period.

Property expenses decreased by 4% for the year mainly because of the sales of properties. Property expenses in respect of the standing portfolio increased by 9.4%. The standing portfolio's municipal costs‚ which represents 59.7% of property expenses‚ increased by 10.7%‚ because of higher electricity‚ rates and water charges.

The fund's gearing level was 14.5%. It said it expected distributions to remain at a similar level for the full financial year.

Source: I-Net Bridge

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