Pretoria - Increased demand for quality office, residential and retail space in the Pretoria central business district helped Premium Properties, the listed property loan stock company, to increase its total distribution by 23.8 percent to 16.1c in the six months to August from 13c in the corresponding period last year.

Jeffrey Wapnick, the managing director, also attributed the company's solid performance to a continued focus on tenant retention, the refurbishment of a number of properties and the conversion of office blocks into residential accommodation.

The distribution comprised a dividend of 0.08c an ordinary share and interest of 16.02c a debenture. Rental income grew by 14.6 percent to R53.3 million from R46.5 million and net rental income from properties by 19.7 percent to R35.37 million from R29.55 million.

Headline earnings a linked unit improved by more than 24 percent to 16.23c from 13.08c.

Wapnick said five properties in the Pretoria central business district were acquired during the period for a total of R12.9 million, in line with management's aim to acquire properties to enhance the quality of the existing portfolio.

He said R10.5 million was spent on the renovation of properties and the conversion of office blocks to residential accommodation.

The vacancy factor of the property portfolio was 7 percent of total potential rental income, which was identical to the previous period.

Premium anticipated it would benefit from the interest rate cuts because just 45 percent of borrowings were fixed, with the balance at variable rates.

Wapnick said the company would continue to focus on its renovation programmes and the conversion of office blocks into residential accommodation.

Speaking at the Rode annual property conference in Johannesburg on Friday, Wapnick, who is also a director of property loan stock group Octodec and managing director of City Property Administration, said South Africa had large and valuable central business districts where investors could buy bricks and mortar at a fraction of their replacement cost and show a decent yield.

But he questioned how many property investors and practitioners would attend a two-day conference in the city centre.

To date premium had created about 2 000 residential units from the conversion of about 12 commercial buildings and had done a similar number of upgrades of retail and commercial buildings.

The company had been able to demonstrate to the banks that these were sustainable developments, said Wapnick.

Premium Properties' share price closed unchanged at R2.65 on Friday.