Acquisitions boost Capital Property

Posted On Friday, 04 February 2005 02:00 Published by eProp Commercial Property News
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Listed property unit trust Capital Property Fund said yesterday distributions for the year to December were 3,72% higher than the year before.

Barry StuhlerCapital MD Barry Stuhler said the increase in distributions was due partly to the acquisition of 65 properties for R760m last August.

Stuhler said the fund had started a rationalisation programme that included the sale of nonperforming properties as well as aggressive letting and expense controls.

The company said its total distribution for the year was 30,43c, higher than the 30,19c distribution forecast in August in a circular to unitholders.

Before the injection of the new portfolio into Capital, the fund had a market capitalisation of about R400m. The company's market capitalisation is now R1,2bn.

Capital's unit price also showed upward movement yesterday following the release of its financial results.

After closing at R3,09 on Wednesday, it rose 11c to R3,20 yesterday afternoon.

Capital's management company, Property Fund Managers, was significantly restructured in the year under review, with Resilient Capital, Old Mutual and Shanduka Properties acquiring the shareholding in Property Fund Managers.

Shanduka, an empowerment company chaired by businessman Cyril Ramaphosa, has the controlling stake.

Stuhler said he was confident that Capital's distribution growth would exceed the listed property industry average this year.

There is consensus among analysts that there will be distribution growth of between 4% and 6%.

He said Capital's borrowings were only 15% of its total assets, which gave it a "competitive edge because we can go out and buy properties for cash up to 30% (of total assets)".

In terms of the law, listed property unit trusts can borrow up to 30% of their total assets.

Stuhler said that after it had completed all the acquisitions of the 2004 financial year it intended to continue growing the property portfolio.

But he said Capital would buy only properties where the "fundamentals are 100%".

"We are looking at growing the portfolio through the acquisition of industrial and retail properties."

Last modified on Tuesday, 13 May 2014 16:09

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