Bleak future for property fund

Posted On Tuesday, 24 February 2009 02:00 Published by eProp Commercial Property News
Rate this item
(0 votes)

Listed property fund SA Corporate Real Estate’s year to December results have not been well-received by some analysts because the company’s distribution per unit fell below its forecast.

Kundayi Munzara









The group, which released its results yesterday, also painted a bleak picture of the future, saying it expected property investment and rental markets to be challenging during the course of the year.

SA Corporate CEO Craig Ewin said the total distribution for the last financial year was 29,75c, which was 2,7% lower than the circular forecast of 30,57c released in March 2007.

The below-forecast distribution reflected weaker market conditions and the higher cost of funding.

Revenue grew from R738,5m to R1,024bn.

Ewin said the fund was continuing with it’s asset disposal strategy and that so far properties worth R220m had been or were in the process of being disposed of.

In October the fund announced its intention to dispose of certain properties in order to reduce the number of properties within the portfolio from about 190 properties to about 150.

It said the disposal of some assets would also improve management’s focus. The goal was also to reduce the number of retail properties in the portfolio as the fund’s retail portfolio comprised 56% of the total portfolio value.

Ewin said several sale agreements had already been concluded.

He said the proceeds from the disposals would be used to fund existing capital commitments, planned retail refurbishments and extensions.

Kundayi Munzara, head of research at Investec Property, said the asset disposal programme was likely to be a positive strategic move, but that SA Corporate would likely sell the assets at a loss in the market as banks required more equity to lend on deals.

As far as the trading environment was concerned, Ewin said conditions had become increasingly challenging for retailers.

Last modified on Friday, 18 April 2014 10:31

Most Popular

Prevance Capital launches the Executive Premier Funding Solution, targeted at experienced, successful property developers and businesses in South Africa

Sep 14, 2021
Are you tired of waiting for lengthy traditional funding methods to be approved? Prevance…

Attacq sees success with high-rise development The Mix

Sep 22, 2021
Waterfall’s latest high-rise residential development, The Mix Waterfall, is approaching…

Multinational companies moving into Nairobi’s new Garden City Business Park

Aug 31, 2021
Garden City Business Park in Nairobi Kenya
With its modern, flexible workspaces and landscaped courtyard areas, the newly completed,…

SAIV offers advice to property owners affected by the July 2021 unrest: You may be eligible for legislated economic relief

Sep 10, 2021
The civil unrest seen in KwaZulu-Natal and parts of Gauteng in July had a devastating…

Another record sale in Johannesburg CBD

Sep 01, 2021
Johannesburg CBD -3
Aucor Property has once again set a record with the sale of 4 mixed-use, multi tenanted…

Please publish modules in offcanvas position.