Growthpoint Properties (GRT) reports that total distributions for the year ended June had increased by 6.1% from 69 cents to 73.2 cents per linked unit.
 
In addition, the market value of Growthpoint linked units increased by 51% from 6.00 rand to 9.06 rand per linked unit. Based on the linked unit price of 6.00 rand as at 30 June 2004, the total income return plus capital appreciation for the year was 63%.
 
Over the last three years, total cumulative returns to linked unitholders averaged 39% p.a.
 
Revenue grew from 837 million rand to 1.014 billion rand - a 21% increase.
 
Apart from normal rental escalations, the 21% increase in revenue was due to additional income from properties acquired during the year and also due to the timing of acquisitions such as the Investec property acquisition effective only for four months in the previous year and Waterfall Mall effective only for three months in the previous year.
 
The operating margin once again improved, from 72.5% of revenue in 2004 to 74.8% in 2005, as the property expense ratio decreased from 27.5% to 25.2% of revenue.
 
The group said an increase in other operating expenses was largely due to the increase in asset management fees, which is a function of the increased market capitalisation and debt following the acquisitions made over the last two years and the improved trading prices of Growthpoint linked units. Expenditure on marketing and advertising was also increased.
 
The decrease in investment income was due to the sale of the bulk of the listed property investment portfolio in the period from December 2004 to June 2005. Subsequent to 30 June 2005, the company sold the balance of its Hyprop linked units and now only retains a 13.8% shareholding in Metboard Properties Limited, a specialised industrial fund, giving Growthpoint additional exposure to the industrial sector.
 
Investment property increased in value by 1.3 billion rand following the discounted cash flow valuation carried out for the entire portfolio as at 30 June 2005. The increase in overall values was in line with expectations, given the decrease in market capitalisation rates over the last year and the increase in projected income.
 
Looking ahead, the group said: "The Growthpoint board anticipates that, subject to market conditions remaining stable, Growthpoint's distributions for the year ending 30 June 2006, should show similar growth to that experienced in the current year."