Premium Properties delivers interim distribution growth of 20.2%

Posted On Friday, 19 October 2007 02:00 Published by eProp Commercial Property News
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Premium Properties Limited today announced a distribution of 40,5 cents per linked unit for its six-month interim period to 31 August 2007

Jeffrey WapnickRepresenting a growth in interim distributions of a noteworthy 20.2% (2006: 33,7 cents per linked unit), the results once again reflect the continuation of the Group’s impressive growth record.

“The prevailing strong trading conditions and management’s proactive approach to letting resulted in rental increases before acquisitions increasing by 14%. This, combined with strict expense control and management’s ongoing programme of redevelopment, has contributed to the increase in distributable earnings per linked unit,” says Premium Properties Limited managing director Jeffrey Wapnick.

“We are confident that, subject to market conditions remaining favourable, the company will continue to produce growing distributions on par with, if not better than, the market average,” notes Wapnick.

Premium’s assets exceed R2,2 billion and during the period it experienced an increase in net asset value of 17%, to 948 cents per linked unit. The JSE-listed property loan stock company’s rental income and net rental income increased by 34.1% and 35.2% respectively, compared with the previous six month period.

In line with its strategic objective of acquiring and redeveloping properties in the Pretoria and Johannesburg CBD and surrounding areas, Premium acquired seven properties, located in Arcadia and the Pretoria and Johannesburg CBDs for a total purchase price of R117 million during the period.

“These properties are strategically situated and will enhance the quality of the overall portfolio and as well as grow income streams,” says Wapnick. The properties include ABSA Pretorius Street, Armadale, Gilboa, Loveday Street, Northvaal, Pavilion and Provisus.

Furthermore Premium’s property portfolio increased in value by R120,6 million to R2,1 billion following the directors’ revaluation. This represents an increase of 6.4%.

The residential project Brisk Place which is situated in the Johannesburg CBD was completed during the period. It is fully let and the yield achieved is well in excess of expectations. R3 million was spent on the Govpret Pretoria office building and Silway mixed-use development in Silverton properties ahead of successful letting of these premises.

Premium’s development of The Fields situated in Burnett Street, Hatfield is progressing well. This project will create 661 residential units as well as 4,000 m² of retail space. The investment is expected to cost in excess of R250 million with an initial yield of approximately 10%. It is anticipated that the project will be completed early in 2008.

During the period 13,632,019 units were issued at a price of 1386 cents which includes a notional distribution pre-payment of 19 cents. These units were placed with selected institutions and investors. The proceeds of R186 million are to be utilised to fund redevelopment and expansion opportunities.

“In the short term the proceeds will be utilised to reduce borrowings and will result in an interest saving at a rate of approximately 11.5%,” notes Wapnick.  An amount of R2,6 million was received as a prepaid distribution. Subsequent to 31 August 2007 an additional 2,867,384 units were placed at an issue price of 1395 cents. The proceeds amounted to R40 million.

Premium’s gearing at the end of the financial year was a conservative 30.2% as against 34.5% at 28 February 2007. At the close of the interim period, interest rates in respect of 65% of borrowings were fixed at a weighted average interest rate of 10.6%, maturing at various dates ranging from May 2009 to September 2010.

The distribution will be paid to linked unitholders on Monday, 19 November 2007.

Last modified on Wednesday, 23 April 2014 11:23

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