Capital Prop Fund 1st half distribution up 6.12%

The property fund said the results were achieved in a difficult macro-economic environment‚ with the office market remaining particularly challenging with high vacancy levels in most nodes and pressure on rentals.

"Despite considerable effort to reduce the office vacancies‚ downsizing and rationalisation by tenants as well as liquidations resulted in the vacancies remaining at a concerning 13.3%‚" it said.

Total comprehensive income for the period increased to R764.7 million‚ from R458.9 million a year earlier.

Total vacancies improved marginally from 6.3% as at December 31 2011 to 6.1% in the review period. Vacancies comprised industrial 4.4%‚ offices 13.3% and retail 6.5% based on gross lettable area.

Looking ahead‚ the group is forecasting growth in distributions of between 4% and 7% per Capital unit for the 2012 financial year.

"Capital is operating in an environment that is characterised by significant pressure on office lease renewals with lower rentals achieved on new lettings. Combined with additional costs being incurred to attract and install tenants‚ this is limiting Capital´s ability to increase net property income." the company said.