Sycom reports 77.18c vs 77.14c earnings distributions

Posted On Thursday, 18 November 2010 02:00 Published by Commercial Property News
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Sycom Property Fund has announced that its distributions for the 6 months ended September 2010 amounted 77.18c from 77.14c a year ago.

Sycom Property Fund announced on Wednesday that its distributions for the six months ended September 2010 amounted 77.18 cents from 77.14 cents a year ago.

Headline earnings per linked unit reduced to 72.94 cents from 85.10 cents previously.

Continued weakness in the office market resulted in a persistent office vacancy of over 10% throughout the period under review, peaking in September 2010 at 11.1%, compared with a much lower average vacancy of 4.3% previously.

This reduced distributions by approximately 2.7 cents per unit or 3.5%.

The weaker office market also resulted in negative rental reversions on leases renewed, with average net rentals declining from R108.16/m2 on expiry to R106.33/m2 on renewal.

"There are positive signs that the office market is entering a recovery phase.

"The level of interest from potential tenants has increased sharply, and management is presently dealing with 18 900m2 of enquiries.

"There has also been an improved retention ratio for leases expiring," the group said.

Sycom's South African retail portfolio fared well, with tenant turnovers increasing by 8.42% in nominal terms, and retail inflation significantly lower over the period.

Vaal Mall showed the strongest turnover growth at just over 11%, with Fourways Crossing at 10.6%, N1 City at just over 9%, Somerset Mall at 6% and Paarl Mall at 5.3%.

Looking ahead, Sycom said it remains focussed on opportunities to enhance shareholder value through the acquisition of high quality retail and office properties, the active redevelopment of existing assets, and the disposal of properties which are no longer fit with the fund's long-term objectives.

"Although there are pleasing signs of recovery in the office market, tenants who have not already committed to new space at this late stage in the year are generally reluctant to do so until the new year.

"Accordingly, the board of Sycom does not expect to see a meaningful reduction in the office vacancy before the end of the financial year in March 2011, and the final distribution is therefore likely to remain relatively flat compared to the prior year," it said.

Source: I-Net Bridge

Publisher: I-Net Bridge
Source: I-Net Bridge

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