Nick Wilson

Property Correspondent

LISTED property unit trust Allan Gray Property Trust (Grayprop) yesterday reported a 10,9% increase in distributions for the six months to March.

Len van Niekerk, head of listed properties at Old Mutual, said that the results were in line with expectations, with growth of almost 11% reflecting “solid organic growth from the underlying property portfolio”.

If Grayprop had made greater use of its ability to borrow, its results could have been better.

According to Van Niekerk, borrowings made up only 6,2% of Grayprop’s total investment properties. Grayprop can, in terms of the law, borrow up to 30% of the value of its assets.

If Grayprop had acquired more properties and developments, Van Niekerk said, it could have made better use of its borrowings, which would have benefited unitholders.

Grayprop said its net distributable income for the first six months of the financial year amounted to 19,3c a unit.

The group is being kept busy with redevelopment on its existing property portfolio.

The fund said that the R110m refurbishment and extension to the N1 City Mall in Cape Town was nearing completion. Grayprop, which owns a 58% share in the mall, said the project included renovating the mall, constructing additional 8500m² and additional 250 parking bays.

The project is expected to generate an initial return of 10,2%.

A further R226m would be invested in the Centurion Mall complex over the next year.

Plans to “reconfigure” the largely vacant lower level of the Boulders Shopping Centre in Gauteng were well advanced and fashion and homeware stores would be introduced.

“Council approval has been obtained and final leasing is being concluded before construction commences. The project is expected to cost R48m,” Grayprop said. Redevelopment at The Brightwater Commons, Randburg, has been put on hold to improve the slow space-letting.

“Plans include alterations to improve the retail mix, parking and circulation, as well as a new Pick ’n Pay store,” Grayprop said. Vacancies equated to about 5% of rental income, it said, the same as at year-end in September.