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VKE - Vukile - Vukile sustains distribution growth and grows fund assets by 25%
Vukile Property Fund Limited
(Incorporated in the Republic of South Africa)
Registration number 2002/027194/06
ISIN: ZAE000056370
JSE Share code: VKE
NSX Share code: VKN
("Vukile")
VUKILE SUSTAINS DISTRIBUTION GROWTH AND GROWS FUND ASSETS BY 25%
Johannesburg, 29 May 2012 - Property loan stock company Vukile today reported a
6.3% increase in the profit available for distribution for the full year to 31
March 2012 to R439.1 million.
Vukile declared and paid an early distribution of 70.5 cents per unit for the
second half of the year in April 2012. In total, the distribution for the full
year was 124.81 cents per unit representing growth of 6.1% for the full year.
The full year`s distribution equals 99.8% of the profit available for
distribution. The early distribution was done to avoid any dilution that would
have resulted through the issue of linked units required to partially fund the
R1.5 billion acquisition of a portfolio of 20 properties from Sanlam, which was
concluded during April 2012.
According to chief executive Laurence Rapp, the property portfolio performed
well in a difficult trading environment in which the industry faced higher
vacancies, escalating costs and an uncertain economic outlook. Within Vukile,
vacancies were well contained at 6.8% as a percentage of gross rentals (2011:
5.9%), decreasing to 5.9% if development vacancies were excluded. The
development vacancies are mostly situated in Randburg Square, where a major
refurbishment of the shopping centre is taking place.
Group corporate administrative expenditure of R25.9 million was similar to the
previous year while group finance costs, net of investment income, have
increased by R4.7 million to R152.1 million.
New leases and renewals of 202 129mSquared with a contract value of R579.5
million were concluded during the year and 74% of leases that expired during the
year were renewed or are in the process of being renewed (2011: 82%). Vukile
was able to achieve positive reversions across all three sectors of retail,
office and industrial and also concluded new deals in line with budgeted
rentals. A once-off lease payment of R27.8 million was received on the expiry
of a long-term structured lease from a major tenant during the year and is
included in property revenue.
The Sanlam property acquisition was successfully concluded post year end and all
the necessary debt and equity funding raised on time and according to plan.
Vukile also successfully listed its domestic medium term note programme in May
this year, which raised R1.02 billion and was used to refinance and wind down
the company`s existing commercial backed mortgage securitisation programme. The
average all-in cost of the corporate bonds issued amounts to 8.8% and represents
a 1% reduction on the old CMBS vehicle. A further positive factor has been the
increased liquidity in the Vukile share which now ranks among the most liquid in
the sector.
Looking ahead, Rapp expects trading conditions to continue to remain challenging
in the year ahead. We expect our retail centres to continue to perform well.
"The portfolio has performed admirably, and we are seeing increased tenant
demand across our portfolio. Additionally, given the increased disposable
income and shifting spending patterns in the lower income segments of the
market, we are exploring a number of new developments and acquisitions of
properties catering to this target group in both rural and urban areas," he
said.
Rapp said he expects a modest uptick in the industrial sector. "Based on our
experience over the past few months, it appears that the office sector may have
bottomed out and, while it is still too early to predict a recovery, it is
encouraging to note vacancy levels across the portfolio are beginning to
improve," he said.
He said the recent Sanlam acquisition, which added some 25% to the size of the
portfolio, was the initial step of the company`s new strategy to be more
acquisitive and proactive, and will also provide it with further scope for
growth. Vukile is confident of again delivering reasonable growth in
distributions in the next year.
For further information contact Laurence Rapp, CEO Vukile Property Fund Limited,
on 083 266 3011
Issued by du Plessis Associates on behalf of Vukile Property Fund Limited.
dPA contact Helen McKane Tel : +27 11 728 4701,Fax: +27 11 728 2547,
Mobile: 082 330 2034 or e-mail: vukile@dpapr.com
website: www.vukile.co.za
Sponsor: Java Capital
NSX sponsor: IJG Securities (Pty) Limited
Date: 29/05/2012 08:56:01 Supplied by www.sharenet.co.za
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