ApexHi Properties Limited has reported a distribution of R196,4-million or 51 cents per A unit (2003: 51 cents) and 58,50 cents per B unit (2003: 54,50 cents), covering the first and second quarterly distributions for the six months ended December 2004.
The second quarter’s distributions are up on the first quarter, with the A units maintaining a quarterly distribution of 25,5 cents, and the B units increasing by 0,50 cents to 29,50 cents.
ApexHi chief executive Gerald Leissner says the interim results follow an active period of acquisitions, disposals, significant leasing deals, and high trading volumes.
A total of 19 properties were acquired for R363,8-million, at an average yield before gearing of 16,4%. Seven properties were disposed at an average yield of 15,5% and the net proceeds of R107,4-million were used to reduce debt.
The property portfolio now comprises a total of 247 properties valued at R3,8-billion, with a gross lettable area of almost two million square metres. As a result of the acquisitions, the composition of the portfolio has shifted away from offices in favour of retail, with 45% of the lettable area in offices, 39% in retail and 16% in industrial.
“ApexHi expects to continue growing the portfolio, and enhancing the retail component. Following the post balance sheet acquisitions and disposals, the office component will drop further to 43% and the retail portion will increase to 41%,” says Leissner.
The directors have revalued the majority of the portfolio, which has resulted in an increase in value of R510,9-million or 16%.The net asset value per unit has increased by 22% from 30 June 2004 to R14,74 per combined unit.
Total borrowings amount to R1,073-billion equating to 28% of the value of the property portfolio. 90% of the debt is currently fixed at a weighted average all inclusive rate of 11,47% and for an average period of four years.
Importantly, the six months to end December 2004 saw a drop in vacancies to 12,7% from 14% in June 2004. Leases for 204,000m2 expired during the period, while leasing deals for some 209,000m2 were signed. Of the total lettings during the period, renewals accounted for 152,063m2 and new leases for 57,013m2 were secured.
In the six months in review, ApexHi also acquired 9 864 502 MICC units at a cost of R65,6-million – a revenue-enhancing transaction. In January 2005, following acceptance of the early settlement offer to MICC shareholders, ApexHi acquired a further 2 744 357 MICC units for R18,6-million. ApexHi now owns 19% of MICC’s issued share capital.
“The investment in MICC was acquired for strategic purposes, and it is not ApexHi’s policy to acquire units in other listed funds,” says Leissner.
Trading volumes remain one of the highest in the sector, with 33% of the A units and 28% of the B units trading in the first six months of the financial year, amounting to trading volumes of approximately R1-billion.
The distribution per unit for the six months ending 30 June 2005 is expected to be at least 51 cents per A unit, and at least 59 cents per B unit. This forecast has not been reviewed or reported on by ApexHi’s auditors.
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