Octodec Investments Limited continues to produce excellent growth in distributions to linked unitholders with distributions increasing by an exceptional 34,5%, to 42,5 cents per linked unit, for its six-month interim period ended 28 February 2006.

“The excellent property mix within the Octodec portfolio combined with a prevailing positive macro economic environment in the form of a robust economy, stable interest rates and a buoyant property market, have all combined to produce these results,” says Russell Inggs, executive director of Octodec Investments Limited and CEO of City Property, which manages Octodec.

Distributable earnings per linked unit for the period totalled 42,8 cents, an increase of 35% over the previous comparative period. At 28 February 2006 Octodec’s assets exceeded R1,4 billion while its net asset value (NAV) increased by 27,1% to R10.49 per linked unit.

Octodec’s gearing at the end of the six-month period was a more conservative 29% as against 34,8% in the comparable period, while interest rates in respect of 68% of borrowings were fixed at an average weighted interest rate of 10,9% maturing at various dates from November 2006 to September 2008.

“The application of property leasing and property management skills, making sure all the basics are in place and our philosophy of keeping property management and asset management under one roof has been instrumental in producing these results,” says Inggs.

He notes that redevelopment of Octodec’s prime retail property Killarney Mall together with the favourable renewal of leases, strict expense control and extremely positive trading conditions have all contributed to the growth in distributable earnings.

Rental income and net rental income increased by 24,7% and 34,3% respectively and Octodec’s retail portfolio, which comprises of five shopping centres, continued to enjoy strong growth in earnings due to favourable renewals and contractual rental escalations.

65% of Octodec’s income flows from A-grade shopping centres in Pretoria and Johannesburg while the remainder of the portfolio, comprising strategically located CBD retail and modern, in-demand light industrial and warehouse space in Silverton, has contributed the balance.

The redevelopment of Killarney Mall was successfully completed in October 2005 at a cost of R97 million. Killarney Mall is anchored by Edgars, Woolworths and Pick n Pay, with Edgars occupying 4,300m² on a 10 year lease.

Octodec’s refurbishment of Waverley Plaza Shopping Centre is scheduled to commence in the third quarter 2006 and its recent refurbishment of Gezina Stad has resulted in much improved rentals  with long leases in place in the fully tenanted shopping centre.

Due to the strong demand for the light industrial premises at Anke Properties, Octodec will undertake the further development of an additional 8,690m² shortly at a cost of R20 million.
 
Subsequent to the financial year end Octodec acquired 5 properties for R99 million.

These purchases include Kyalami Crescent, Centre Forum situated in the Pretoria CBD and three light industrial properties situated in Selby and City Deep.

The distribution will be paid to Octodec linked unitholders on Monday, 22 May 2006.

“We are optimistic about Octodec’s ability to grow earnings on par with, if not better than, the market average due to its continued focus on strategic priorities and the expected continuation of favourable economic conditions,” says Inggs.

~ Ends ~

For further information, please contact:

Russell Inggs
Cell: 083 271 0521
Office:  012 319 8712

PA:  Yvonne Smart
Office:  012 319 8713

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Sandy Davey
Cell: 083 453 6668
Office: 011 783 0700