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THE DIRECTORS OF PROPERTY FUND MANAGERS LIMITED - MANAGEMENT COMPANY OF CENPROP
AND CAPITAL ANNOUNCE THAT THE UNAUDITED INTERIM RESULTS OF THE FUNDS FOR THE
SIX MONTHS ENDED 30 JUNE 1998 ARE AS FOLLOWS:
CITY CENTRE PROPERTY FUND
("CENPROP")
CENPROPS LONG-TERM OBJECTIVE IS TO MAINTAIN INVESTMENTS IN WELL TENANTED,
QUALITY OFFICE AND RETAIL PROPERTIES
UNAUDITED UNAUDITED
(R000) 1998 1997
TURNOVER 30 315 27 044
NET INCOME DERIVED FROM FIXED
PROPERTY COMPANIES 23 686 20 250
INTEREST RECEIVED 1 759 2 012
SERVICE FEE (758) (800)
OTHER EXPENDITURE (910) 91 (881) 331
NET INCOME AVAILABLE FOR
DISTRIBUTION 23 777 20 581
RETAINED INCOME AT BEGINNING
OF YEAR 10 10
TOTAL INCOME AVAILABLE FOR DISTRIBUTION 23 787 20 591
DIVIDEND DISTRIBUTION 23 777 20 581
RETAINED INCOME AS AT 30 JUNE 1998 10 10
UNITS IN ISSUE
AT 30 JUNE 163 490 707 163 490 707
EARNINGS AND DIVIDENDS PER UNIT (CENTS) 14,54 12,58
ABRIDGED BALANCE SHEET AT 30 JUNE (R000) 1998 1997
R000 R000
CAPITAL EMPLOYED 255 637 255 739
REPRESENTED BY
INVESTMENT IN PROPERTY 248 233 246 448
CURRENT ASSETS 76 487 29 895
CURRENT LIABILITIES 24 452 20 604
NET CURRENT ASSETS 7 404 9 291
255 637 255 739
COMMENT
1. INCOME
NET DISTRIBUTABLE INCOME FOR THE PERIOD UNDER REVIEW TOTALLED R23,8 MILLION.
CENPROP'S DIVIDEND OF 14,54 CENTS PER UNIT FOR THE SIX MONTHS TO 30 JUNE 1998
REPRESENTS AN INCREASE OF 15,6% WHEN COMPARED WITH THE 12,58 CENTS PER UNIT
ACHIEVED TO 30 JUNE 1997. THE RESULTS REFLECT IMPROVED OCCUPANCIES AND LETTINGS
WITHIN CENPROP'S PORTFOLIO, ESPECIALLY IN THE MALL OF ROSEBANK, JHI HOUSE AND
NBS BUILDING.
2. INVESTMENTS
CENPROP IN ASSOCIATION WITH OTHER ROSEBANK PROPERTY OWNERS HAS LODGED AN
APPLICATION WITH THE EASTERN METROPOLITAN SUBSTRUCTURE (EMS) FOR THE CLOSURE
AND ACQUISITION OF THE PORTION OF CRADOCK AVENUE WHICH IS LOCATED ON THE
EASTERN SIDE OF THE MALL OF ROSEBANK. IN TERMS OF THE APPLICATION, IT IS
PROPOSED THAT THE MALL WILL CONSTRUCT AND CREATE A FORMAL CURIO MARKET TO
ACCOMMODATE A RESTRICTED NUMBER OF TRADERS DRAWN FROM THE EXISTING STREET
VENDORS SPECIALISING IN AFRICAN CRAFTS. IN ADDITION, FURTHER RETAIL
ACCOMMODATION AND ROOFTOP PARKING WILL BE PROVIDED AT THE MALL.
THE APPLICATION IS EXPECTED TO BE HEARD BY THE EMS BEFORE THE END OF 1998 AND
IS SUPPORTED BY THE ADJOINING PROPERTY OWNERS, THE ROSEBANK MANAGEMENT FORUM
AND OTHER INTERESTED GROUPS. THIS EXPANSION OF THE MALL, COUPLED WITH THE
RE-DEVELOPMENT OF EXISTING RETAIL SPACE BY A MAJOR INSTITUTION IN ROSEBANK,
WILL FURTHER ENTRENCH ROSEBANK AS THE LEADING OFFICE AND RETAIL NODE IN GAUTENG
3. FUNDS
CENPROP'S FINANCIAL RESOURCES ARE FULLY INVESTED. THIS IS IN ACCORDANCE WITH
CENPROP'S POLICY OF ALLOWING FOR COMPLETION OF CURRENT COMMITMENTS AND PLANNED
REFURBISHMENTS AND NOT HOLDING SURPLUS CASH.
4. INVESTMENT POLICY
THE QUALITY OF CENPROP'S PROPERTY PORTFOLIO IS CONTINUOUSLY BEING UPGRADED
THROUGH EXPANSION AND REFURBISHMENT OF EXISTING INVESTMENTS AND INVESTIGATION
OF NEW OPPORTUNITIES. CERTAIN PROPERTIES WHICH NO LONGER MEET THE PROFILE AND
INVESTMENT CRITERIA OF THE FUND HAVE BEEN IDENTIFIED FOR DISPOSAL.
5. OUTLOOK
THE EFFECTS OF HIGH INTEREST RATES AND LACK OF GROWTH IN CONSUMER SENDING COULD
ADVERSELY AFFECT TURNOVER RENTALS AND RENEWALS DURING THE SECOND HALF OF 1998,
RESULTING IN EARNINGS GROWTH BEING MARGINALLY LOWER THAN THAT ACHIEVED IN THE
FIRST HALF OF THE YEAR.
DIVIDEND DECLARATION
NOTICE IS HEREBY GIVEN OF THE DECLARATION OF DIVIDEND NO. 38 IN RESPECT OF THE
INCOME DISTRIBUTION PERIOD
1 JANUARY 1998 TO 30 JUNE 1998. THE DIVIDEND AMOUNTS TO 14,54 CENTS PER UNIT
AND IS PAYABLE TO UNITHOLDERS REGISTERED AS SUCH IN THE BOOKS OF THE FUND AT
THE CLOSE OF BUSINESS ON 21 AUGUST 1998. DIVIDEND CHEQUES WILL BE POSTED ON OR
ABOUT 28 AUGUST 1998.
ON BEHALF OF THE BOARD
JHI PROPERTY SERVICES LIMITED
SECRETARIES
6 AUGUST 1998
CPF
CAPITAL PROPERTY FUND
("CAPITAL")
CAPITAL'S LONG-TERM OBJECTIVE IS TO HOLD A WELL BALANCED, BROAD PORTFOLIO OF
STRATEGICALLY LOCATED INDUSTRIAL, WAREHOUSE, OFFICE, PARKING AND RETAIL
PROPERTIES
UNAUDITED UNAUDITED
(R000) 1998 1997
TURNOVER 24 444 28 357
NET INCOME DERIVED FROM FIXED
PROPERTY COMPANIES 19 633 21 014
INTEREST RECEIVED 4 719 4 888
SERVICE FEE (873) (805)
OTHER EXPENDITURE (852) 2 994 (882) 3 201
NET INCOME AVAILABLE FOR
DISTRIBUTION 22 627 24 215
RETAINED INCOME AT BEGINNING OF YEAR 3 3
TOTAL INCOME AVAILABLE FOR DISTRIBUTION 22 630 24 218
DIVIDEND DISTRIBUTION 22 627 24 215
RETAINED INCOME AS AT 30 JUNE 1998 3 3
UNITS IN ISSUE
AT 30 JUNE 146 838 565 146 838 565
EARNINGS AND DIVIDENDS PER UNIT (CENTS) 15,40 16,49
LESS NET INCOME FROM KINGS PARKADE TO
JUNE 1997 - 66
EARNINGS PER UNIT (CENTS) EXCLUDING
KINGS PARKADE 15,40 15,83
ABRIDGED BALANCE SHEET AT 30 JUNE (R000) 1998 1997
R000 R000
CAPITAL EMPLOYED 308 894 305 518
REPRESENTED BY
INVESTMENT IN PROPERTY 277 598 273 760
CURRENT ASSETS 31 712 56 375
CURRENT LIABILITIES 416 24 617
NET CURRENT ASSETS 31 296 31 758
308 894 305 518
1. INCOME
NET DISTRIBUTABLE INCOME FOR THE PERIOD UNDER REVIEW TOTALLED R 22,6 MILLION,
WHICH REPRESENT A MARGINAL DECLINE OF 2,7% IN COMPARISON WITH THE FIRST HALF OF
THE PREVIOUS YEAR, AFTER EXCLUDING THE INCOME FROM THE PARKING LEASE AT THE
KINGS CITY PARKADE LOCATED IN THE JOHANNESBURG CBD. AS PREVIOUSLY REPORTED, IN
TERMS OF THIS LEASE CANCELLATION, UNITHOLDERS WERE PAID AN EXCEPTIONAL DIVIDEND
OF 4,6 CENTS PER UNIT TO RECOGNISE THE LOSS OF INCOME FOR THE REMAINING SIX
YEARS OF THE LEASE.
THE FORECAST LETTING OF ERF 991 CLAYVILLE, MIDRAND AND ERF 2713 PRETORIA WHICH
DID NOT MATERIALISE DURING THE PERIOD UNDER REVIEW. HOWEVER, THESE PROPERTIES
HAVE NOW BEEN FULLY LET WITH EFFECT FROM JULY 1998.
2. INVESTMENTS
THE CAPITAL PROPERTY FUND, IN JOINT VENTURE WITH THE MINE OFFICIALS PENSION
FUND AND MINE EMPLOYEES PENSION FUND, HAS SUCCESSFULLY LAUNCHED THE CAPITAL
HILL COMMERCIAL ESTATE LOCATED IN MIDRAND. CAPITAL HILL IS A PRIME COMMERCIAL
AND INDUSTRIAL ESTATE WHICH OFFERS EASY ACCESS TO ALL MAJOR FREEWAYS AND STATE
OF THE ART SECURITY. DEVELOPMENTS TAILORED TO TENANT REQUIREMENTS ARE BEING
OFFERED AT COMPETITIVE RATES. NEGOTIATIONS WITH VARIOUS NATIONAL AND
MULTI-NATIONALS ARE UNDER-WAY.
3. DISPOSALS
3.1 THE CAPITAL PROPERTY FUND IS CONTINUING ITS STRATEGY FOR THE DISPOSAL OF
SELECTED PROPERTIES WHICH NO LONGER MEET ITS INVESTMENT CRITERIA.
CAPITAL DISPOSED OF REMAINDER OF ERF 107104 MAITLAND FOR A TOTAL OF R4,4
MILLION. WHEN COMPARED WITH THE CURRENT BOOK VALUE AND AFTER MAKING ALLOWANCES
FOR AGENTS COMMISSION, THIS SALE WILL REALISE A PROFIT OF APPROXIMATELY R1,2
MILLION WHICH WILL BE TRANSFERRED TO CAPITAL RESERVES. TRANSFER OF THE PROPERTY
IS EXPECTED TO TAKE PLACE DURING AUGUST 1998.
4. FUNDS
AFTER MAINTAINING A FLOAT OF R10 MILLION TO PROVIDE FOR EXTENSIONS AND
REFURBISHMENT TO CAPITAL'S EXISTING PORTFOLIO IN TERMS OF THE MANAGEMENT
COMPANY'S POLICY, AN AMOUNT OF R18,4 MILLION WILL BE AVAILABLE FOR FURTHER
INVESTMENT.
5. OUTLOOK
ALTHOUGH THE CURRENT HIGHER REAL INTEREST RATES WILL HAVE AN ADVERSE EFFECT ON
THE DISPOSAL OF SELECTED PROPERTIES HELD BY CAPITAL IN THE SHORT TERM, IT IS
EXPECTED THAT THE MARKET CONDITIONS WILL STABILISE IN THE MEDIUM TERM.
OVER THE NEXT SIX MONTHS, LEASES EXPIRING AT OLD PRETORIA ROAD, MIDRAND AND 12
HOCKING PLACE, PINETOWN MAY RESULT IN A TEMPORARY INCREASE IN VACANCIES.
HOWEVER, STRONG LETTING INTEREST HAS BEEN EXPRESSED IN THESE PROPERTIES AND
MANAGEMENT ARE CONFIDENT THAT BOTH WILL BE RE-LET DURING THE SECOND HALF OF THE
YEAR. CAPITAL'S OCCUPANCY LEVELS ARE CURRENTLY 90% AND IT IS EXPECTED THAT THIS
LEVEL OF OCCUPANCY WILL STEADILY INCREASE.
CAPITAL'S EARNINGS FOR THE YEAR ENDING DECEMBER 1998 ARE EXPECTED TO BE
MARGINALLY LOWER WHEN COMPARED WITH THE 33,23 CENTS ACHIEVED FOR THE PERIOD
ENDING DECEMBER 1997.
DIVIDEND DECLARATION
NOTICE IS HEREBY GIVEN OF THE DECLARATION OF DIVIDEND NO. 30 IN RESPECT OF THE
INCOME DISTRIBUTION PERIOD
1 JANUARY 1998 TO 30 JUNE 1998. THE DIVIDEND AMOUNTS TO 15,40 CENTS PER UNIT
AND IS PAYABLE TO UNITHOLDERS REGISTERED AS SUCH IN THE BOOKS OF THE FUND AT
THE CLOSE OF BUSINESS ON 21 AUGUST 1998. DIVIDEND CHEQUES WILL BE POSTED ON OR
ABOUT 28 AUGUST 1998.
ON BEHALF OF THE BOARD
JHI REAL ESTATE LIMITED
SECRETARIES
6 AUGUST 1998
REGISTERED OFFICE:
1ST FLOOR, JHI HOUSE, 11 CRADOCK AVENUE, ROSEBANK, JOHANNESBURG 2196
PO BOX 2100, PARKLANDS 2121
TRANSFER SECRETARIES:
MERCANTILE REGISTRARS LIMITED, 6TH FLOOR, 94 PRESIDENT STREET, JOHANNESBURG 200
PO BOX 1053, JOHANNESBURG 2000 PROPERTY FUND MANAGERS LTD
CO. REG. NO. 80/09531/06
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