Capital Property lifts payout 11%

Posted On Thursday, 02 August 2007 02:00 Published by eProp Commercial Property News
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Capital has announced an interim distribution of 20,10c a unit, compared with the 18,13c a unit in the same period last year

Barry StuhlerListed property unit trust Capital Property Fund yesterday reported a 10,87% increase in distribution growth for the six months to June thanks to rental increases, rental increases on re-lettings, as well as new lettings.

Capital announced an interim distribution of 20,10c a unit, compared with the 18,13c a unit in the same period last year.

Some listed property commentators are expecting 13% growth in distributions from listed property companies reporting results this month.

But Capital MD Barry Stuhler said Capital's distribution increase was due to "only direct property-related increases" as Capital was a property unit trust and did not place other extraordinary profits in its income statement.

"This (Capital's growth) is pure growth from increases on current rental escalations, increased rentals on renewals and new lettings," Stuhler said.

During the period, Capital acquired 19 properties for R663m in Gauteng. Stuhler said the bulk of these properties were A-grade properties in sought-after areas.

Capital sold 16 nonstrategic properties for R275m, resulting in a capital profit of R43m. Stuhler said that the proceeds were "utilised to extinguish debt in the current interest rate sensitive environment".

The fund's overall property portfolio vacancy factor remained extremely low at 1,6%.

Stuhler said the vacancy factor was "in the same region" in the past period.

"It's an indication of underlying quality property assets. In the current environment, quality buildings should have little or no vacancies," he said.

Based on book value, industrial property makes up 46% of Capital's portfolio, while offices and retail make up 36% and 18% respectively.

Stuhler said the portfolio was "moving closer in line" with Capital's strategy of concentrating on the industrial and office property sectors.

Capital said that strong economic growth accompanied by rising building costs boded well for rising rentals and capital growth for commercial real estate in SA.

"In the industrial (property) sector, these factors are further positively influenced by a shortage of zoned land in good locations," said the fund

"Capital is expected to continue to provide strong growth in distributions for the foreseeable future."

Last modified on Wednesday, 23 April 2014 19:31

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