Premium Properties distribution is up 29,2%

Posted On Wednesday, 21 April 2004 02:00 Published by eProp Commercial Property News
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Premium Properties Limited today announced a distribution of 21,9 cents per linked unit, totalling a distribution of 38 cents for the year ended 29 February 2004.

Jeffrey WapnickThis represents an impressive increase from the total distribution of 29,4 cents per linked unit for the previous year.

Premium’s results represent a year-on-year increase of 29,2% in distribution per linked unit and 29,2% in headline earnings per linked unit for this listed property fund. The distribution will be paid on Monday 17 May 2004.

"The property market and, in particular, the Pretoria CBD office and residential sectors have performed well and we are of the view that the Premium portfolio is favourably positioned to continue to yield growing distributions to unit holders into the future," said Jeffrey Wapnick, Managing Director of Premium.

"Two profitable residential conversions were completed at the end of 2003 and the full benefit of these conversions, which are now fully let, will impact positively on the financial results for the year ending February 2005," said Wapnick.

Wapnick added that Premium’s distribution for the financial year ending on 28 February 2005 will represent an increase of at least 8%, subject to prevailing market conditions and the interest rate environment remaining unchanged.

Premium’s exceptional growth in earnings and distribution for the year can be attributed largely to the demand for good quality space and the resultant rental growth, with rental income increasing by 13,5% and net rental income increasing by 15,8%.

This income was boosted due to a combination of stronger trading activities, as well as a number of yield-enhancing acquisitions and new residential conversions being included in Premium’s portfolio.

During the financial year, Premium acquired nine properties in the Pretoria CBD for R37 million, all at favourable forward yields, in line with Premium’s objective of acquiring properties to further enhance the quality of the existing portfolio.

These newly acquired properties include Standard Bank Chambers on Church Square, Nedbank Building on the corner of Andries and Church Street and the old SA Perm building on the corner of Pretorius and Paul Kruger Streets.

An amount of R25,6 million was spent on the renovation of properties and the conversion of office blocks to residential accommodation resulting in the completion of two new residential conversions.

Vacancies within the portfolio have decreased with 93% of the total available space let.

At the close of its financial year, the Premium property portfolio was valued at R668.4 million, a 10.1% increase on the previous valuation.

In addition the improved performance from an associate company, IPS Investments (Pty) Ltd, in which Premium owns a 40% stake, also contributed to Premium’s positive results. Income from IPS increased significantly on the back of increased demand for residential accommodation.

A significant reduction in financing costs is yet another factor that boosted Premium’s earnings and distribution.

Borrowings equate to 49,3% of value of the property portfolio and interest rates have been fixed on 49% of these borrowings at various maturity dates not extending beyond March 2007, at a weighted average cost of borrowings of 11.2%.

In addition, Premium investors can enjoy the profits of the hugely successful residential sectional-title development, Riverside Place in Centurion, with which IPS is currently involved, in the next financial year. The development was completed and fully sold as at 29 February 2004.

"Premium achieved tremendous growth during the financial year March 2003 to February 2004, and we have every confidence that it will continue to perform at this level, with many new exciting projects and acquisitions already on the cards," said Wapnick.

Issued on behalf of Premium Properties

By Marketing Concepts

Sandy Davey

Tel: 011 880 2213

Octodec Investments

Jeffrey Wapnick

Tel: 012 326 8811

Cell: 082 900 1172

Last modified on Saturday, 10 May 2014 09:50

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