Arrowhead Properties on track amidst a challenging environment

Posted On Monday, 16 March 2020 09:54 Published by
Rate this item
(0 votes)

Arrowhead Properties, the Real Estate Investment Trust (REIT) with a diversified portfolio of retail, office and industrial properties today reported, during an investor update, that its portfolio is performing in line with expectations despite the prevailing uncertainty in the market.

Mark_Kaplan

Impressed with the team’s hands on asset and property management, CEO Mark Kaplan commented: “The additional hands on deck employed over the past two years have certainly made a difference to our business, adding tremendous value in the management of our assets to ensure it performs optimally during uncertain times.”

The Company’s disposal programme is progressing very well and after excluding the R551 million of asset disposals that transferred at the end of 2019, Arrowhead’s current disposal pipeline includes 42 non-core assets with a sales value of R913 million at an average 1% premium to book value. Of this, R276 million (30% of current disposals) has already transferred and the balance is expected to transfer during the second half of the financial year. We do expect an increasing discount to book value going forward given the difficulty being experienced in the current sales market.

Kaplan commented: “The successful disposal program aides in the repositioning of our portfolio and enhances the quality of our overall asset base. Some proceeds have been used for capital expenditure and solar investments to ensure that our assets remain relevant in the areas it operates in. A further 10% of the proceeds received have been used to buy back shares while the majority of the funds have been used to reduce debt.”

With the further devaluation of the listed investments, the share buyback program, capital expenditure and solar investments during the 6-month period, the Company expects the LTV to be around 41.5% as at 31 March 2020.

Tenant retention (lease renewals and re-lets of space not renewed) is expected to be around 85%, a further testimony of the team’s effectiveness. Leasing results have been in line with the Company’s expectations and forecast while vacancies are set to remain stable around 8% when the Company reports its interim results.

“The team works closely with tenants to understand their needs and our asset management initiatives have been very effective. Although our portfolio is well positioned, we are cognisant that the recent emergence of the COVID-19 virus globally will have an effect on our portfolio. We remain cautious and continue to monitor events closely,” concluded Kaplan.

Last modified on Tuesday, 17 March 2020 10:07

Most Popular

53 Telkom properties coming up for auction

Mar 02, 2020
Orange Grove
GoIndustry DoveBid SA (GoIndustry) is hosting another massive property auction on behalf…

Balwin's Munyaka registers record R850 million in opening weekend sales, selling 555 apartments

Mar 09, 2020
Steve_Brookes_Balwin_Properties
JSE listed Balwin Properties, a developer that cares about environmentally responsible…

Young buyers driving residential property market in Bloemfontein

Mar 04, 2020
Bloem Willows
Bloemfontein is experiencing a surge in residential property transactions concluded by…

Hyprop bolsters Rosebank Mall offering through securing the Checkers Premium FreshX concept

Mar 04, 2020
Rosebank Mall
Shoppers at Rosebank Mall in Johannesburg can look forward to a world-class supermarket…

Fairvest Property Holdings maintains above-inflation growth in challenging market

Mar 02, 2020
Darren Wilder CEO Fairvest Property Holdings
Fairvest Property Holdings Limited (“Fairvest”) today again announced solid results for…

Please publish modules in offcanvas position.