JSE-listed property company Redefine Income Fund has reported double-digit distribution growth for the year to August, compared with the previous period.

Although this growth was below the company’s expectations, Redefine remained optimistic about future growth.

Distributable earnings rose 19,1%. Net income from properties held for the full 12-month period grew 13% due to good leasing, rental renewals and proceeds from completed developments.

Annual distributions grew 10,5% to 56,63c per linked unit.

CEO Brian Azizollahoff said the distribution growth of 10,5% was less than the forecast 12% to 14% due to slower sales at the Oasis Luxury Retirement Estate. Sales at the retirement village had been affected by rising interest rates. He said 67% of the retirement village’s units had been sold.

Azizollahoff said R10m in income had been expected from Oasis.

He said forecasts for next year had been revised and were more cautious.

He expected Redefine’s distributions per linked unit for the new financial year to increase by between 9% and 11% compared with the past year.

He said the distribution growth outlook for Redefine was not at the same level as in recent years.

Marc Wainer, executive director of Madison Property Fund Managers, the asset manager of Redefine, said property developments next year would have a more positive effect on Redefine’s financial results.

He said he had not seen any effects of the global credit crunch on his tenants yet, but in the interim period the group would be more cautious.

Kundayi Munzara, head of research at Investec Property, said Redefine’s results highlighted the change in market dynamics as letting activity had slowed across most sectors. Munzara said despite the difficulties experienced with Oasis, cost to income ratios had been maintained below 20% and vacancies had improved from 4,8% to 3,4%, which indicated that operational performance had been fairly strong.

Redefine’s current project under development is Festival Town Square, in Kempton Park, the cost of which was estimated at R157,1m with an anticipated initial forward yield of 9,7%.

Weiner said there was better value in the listed property space and, in terms of growing the fund’s offshore exposure, it would continue to do this through Sycom Property Fund.

Redefine reported a year-end total debt of R3,6bn, which represented gearing of 35,2%, up from the previous year’s 33,9%.

Redefine’s share price opened 2,50% higher yesterday to trade at R5,74.

The market did not appear to react to the results as listed property was higher across the board on bond yields.