Nick Wilson

Property Correspondent

LISTED property loan stock company Vukile Property Fund has reported solid interim results, recording an 8,3% increase in distributions for the six months to September, compared with last year.

Vukile CEO Gerhard van Zyl said yesterday the interim distribution of 32,5c was due to the performance of the company’s underlying properties and reduced vacancy levels.

Vacancies as a percentage of gross rentals have fallen from 4,1% on September 30 last year to 3,8% at the end of September this year.

Van Zyl said Vukile had not yet seen the benefits of the R2bn debt-securitisation programme the company implemented on October 31 but this would have a positive effect on second-half and full-year results.

The securitisation programme would reduce Vukile’s overall debt from 11,16% to 10% after all upfront, ongoing and hedging expenses had been taken into account.

Catalyst Securities MD Andre Stadler said Vukile had reported a "good set of results" and that distributions were in line with the sector average increase. "The debt securitisation will benefit distribution growth going forward," said Stadler.

Van Zyl said discussions were under way which may lead to a substantial portion of Sanlam’s 58% shareholding in Vukile being sold to a black empowerment consortium.

If an empowerment transaction was concluded, it would reduce Sanlam’s shareholding. Van Zyl said this would be "good" as it would not have such a dominant shareholder, a situation that was normally negative for tradability in a share.

If an empowerment deal went ahead, there would be no dilution to Vukile’s distributions: it would be borne out of existing shareholding.