Speaking on the sidelines of the function for the release of its financial results for the six months to February, Mazwai said the company had managed to build a defensive portfolio of shopping centres and state-tenanted offices that enabled it to achieve 7% dividend growth.
Rebosis concluded a transaction valued at R5bn, acquiring two large regional malls - Baywest Mall in Port Elizabeth and Forest Hill in Pretoria - and internalised its asset and property management entities.
The group declared a dividend of 60.08c per share for the period that reflected 7.07% dividend growth. This was in line with the 7%-9% guidance expected for the financial year.
Total distributable income increased 32.7% to R389m from R293m. Following various acquisitions, assets under management rose 51% from R11.8bn to R17.9bn.
Rebosis' retail portfolio makes up 62% of its South African assets and consists of six shopping malls.
"We saw strong retail performance despite a depressed retail sales environment.
"This performance was largely led by Baywest Mall, which held the highest trading density growth at 11.6%, and Bloed Street Mall."
Retail vacancies were reduced to 1.5%, Mazwai said.
Rebosis' office portfolio consists of 14 buildings, mainly single-tenanted buildings let to the Department of Public Works that have provided average escalations of 8.2%.
CEO Sisa Ngebulana said Rebosis had taken steps to safeguard itself against risks associated with weak consumer confidence and a sluggish economy.
"We achieved exciting growth in total assets and income during the six-month period. We were also able to hedge 100% of our debt and extend debt maturity profiles to mitigate potential risks that arise as a result of a market downgrade and low economic growth. To have achieved a 38% increase in net property income while reducing overall vacancies to 2.4% bears testament to our defensive office-sovereign underpin and the dominant retail strength in the portfolio, which we believe will continue to perform well in a sluggish economic environment."
Garreth Elston of Golden Section Capital said Rebosis' strong management had put it on a positive track.
"Rebosis has made substantial progress on advancing the business. This set of interim results is a solid indication that the company is on the right track. Having 62.3% of the portfolio in retail assets and 36.6% in government-tenanted offices, plus 100% of its debt fixed does result in a very defensive portfolio that should see the company weather the current economic uncertainty.
"The only area we are a little concerned about is the company's present loan-to-value (LTV) ratio of 41.8% as we believe it is tending towards the higher end, but the company does have several properties up for sale which if concluded should see the LTV ratio come down to a more prudent level," he said.
Source: Business Day
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