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Dividend Declaration
AUDITED ANNUAL FINANCIAL STATEMENTS AND FINAL DIVIDEND DECLARATION
The directors of Property Fund Managers Limited, management company of
Cenprop and Capital, announce that the audited consolidated results of the
Trusts for the year ended 31 December 2001 are as follows:
CENTRE CITY PROPERTY FUND
Share code CEN
ISIN ZAE000001335
("Cenprop")
CAPITAL PROPERTY FUND
Share code CPL
ISIN ZAE000001731
("Capital")
CONSOLIDATED INCOME STATEMENTS
CENPROP CAPITAL
2001 2000 2001 2000
R'000 R'000 R'000 R'000
Net property income 71 074 74 108 55 690 49 812
Interest 3 875 3 821 3 149 9 730
74 949 77 929 58 839 59 542
Operating expenditure 18 846 16 363 12 227 10 358
Headline earnings 56 103 61 566 46 612 49 184
Net write-up/(down) on
revaluation of
investment property 15 877 (1 267) (3 456) 7 148
Net surplus/(deficit)
on disposal of
investment property 230 (2 329) 1 118 (288)
Net income 72 210 57 970 44 274 56 044
Capital (surplus)/
deficit transferred
(to)/from non-
distributable reserve (16 107) 3 596 2 338 (6 860)
Income for year available
for distribution 56 103 61 566 46 612 49 184
Units in issue 163 490 707 163 490 707 146 838 565 146 838 565
Net income
(cents per unit) 44,17 35,46 30,15 38,17
Headline earnings
(cents per unit) 34,31 37,65 31,74 33,50
Income distribution
(cents per unit) 34,31 37,65 31,74 33,50
Net asset value
(cents per unit) 326 316 253 255
CONSOLIDATED BALANCE SHEETS
Assets
Non-current assets
Investment property 537 880 505 653 370 122 364 887
Current assets 38 205 53 285 36 891 48 559
Total assets 576 085 558 938 407 013 413 446
Unitholders' interest
and liabilities
Unitholders' interest 533 063 516 956 372 209 374 547
Current liabilities 43 022 41 982 34 804 38 899
Total unitholders'
interest and liabilities 576 085 558 938 407 013 413 446
CONSOLIDATED STATEMENTS OF CHANGES IN UNITHOLDERS' INTEREST
Capital of Trust 252 781 252 551 312 869 311 751
Balance at
beginning of year 252 551 254 880 311 751 312 039
Net surplus/(deficit) on
disposal of property 230 (2 329) 1 118 (288)
Non-distributable reserve 280 272 264 395 59 340 62 796
Balance at beginning of
year as restated 264 395 265 662 62 796 55 648
As previously reported - - - -
Change in accounting
policy (refer below) 264 395 265 662 62 796 55 648
Adjustment to current
independent valuation
of investment property 15 877 (1 267) (3 456) 7 148
Undistributed income 10 10 - -
Balance at
beginning of year 10 10 - -
Income for year available
for distribution 56 103 61 566 46 612 49 184
Income distributions (56 103) (61 566) (46 612) (49 184)
Total unitholders'
interest at end of year 533 063 516 956 372 209 374 547
ABRIDGED CONSOLIDATED CASH FLOW STATEMENTS
Net cash (outflow)/inflow
from operating activities (9 964) 2 368 5 600 (4 595)
Net cash (outflow)/inflow
from investing activities (16 349) 6 499 (12 881) (47 234)
Net (decrease)/increase
in cash resources (26 313) 8 867 (7 281) (51 829)
Cash resources at
beginning of year 42 572 33 705 36 302 88 131
Cash resources at
end of year 16 259 42 572 29 021 36 302
NOTES:
1. Capital expenditure
during year. 42 421 7 718 1 037 50 217
2. Capital expenditure
committed or authorised
at 31 December. 7 715 49 600 534 4 100
COMMENTS
CHANGE IN ACCOUNTING POLICIES
The results of the trusts are presented in compliance with South African
Statements of Generally Accepted Accounting Practice, except with regard to
the treatment of provisions for maintenance as previously explained to
unitholders.
The introduction of new statement AC 135 during the review period required
the Trusts to change their accounting policies in respect of the valuation
of investment properties. Fixed property is now reflected at fair value. The
effect on prior years has been accounted for as a prior year adjustment.
INCOME DISTRIBUTIONS
Income available for
distribution
(cents per unit) 34,31 37,65 31,74 33,50
Dividend (cents per unit) 34,31 37,65 31,74 33,50
- Interim 18,08 18,03 16,32 16,51
- Final 16,23 19,62 15,42 16,99
CHANGE IN ACCOUNTING POLICIES
The results of the Trusts are presented in compliance with South African
Statements of Generally Accepted Accounting Practice, except with regard to
the treatment of provisions for maintenance as previously explained to
unitholders.
The introduction of new statement AC 135 during the review period
required the Trusts to change their accounting policies in respect of the
valuation of investment properties. Fixed property is now reflected at the
fair market value. The effect on prior years has been accounted for as a
prior year adjustment.
COMMENTARY
CENPROP
1. Income
Income available for distribution is 34,31 cents per unit (2000: 37,65
cents)
Allowing for the interim dividend of 18,08 cents per unit (2000: 18,03
cents) a final dividend of 16,23 cents per unit (2000: 19,62 cents) will be
distributed at the beginning of March 2002.
2. Portfolio update
The year ended 31 December 2001 saw the successful completion of the Pick 'n
Pay phase of The Mall of Rosebank. The second phase refurbishment which is
due for completion in March 2002, will see a marked improvement to the
customer flows and tenant mix in the upper level and to the area adjacent to
the pedestrianised Cradock Avenue. The disruptive effects of these
alterations, especially in the last quarter of 2001, resulted in a
significant decrease in rental and parking income for the year under review.
The ten-year head lease over the JHI House property terminated on 31
December 2001. At that date the vacancy level was 15%. A number of lettings,
including a new five year lease with JHI Real Estate Limited, have taken
place in January 2002 and it is expected that given renewed tenant interest
in Rosebank, the remaining space will be progressively let.
Hutton Court was sold to Capital during July 2001 for R26,4 million as it
did not form part of Cenprop's long-term strategy, but fitted Capital's
strategy to reduce its exposure to the industrial market. An independent
valuer was utilised to determine a fair market price.
The Society of Advocates' lease over 10 000 m2 in Innes Chambers, across
the road from the Johannesburg Supreme Court, expires at the end of March
2002. Negotiations to renew 40% of this space are currently being concluded
and a strategy to re-let the balance is underway.
The agreement of lease with Arthur Andersen at Andersen Park in Hyde
Park, Johannesburg terminated at the end of 2001. An extensive marketing
strategy has been adopted to re-let this property which is situated in an
attractive, park-like environment.
3. Portfolio valuation
The entire portfolio was valued during December 2001 by JHI Real Estate
Limited at a total open market value of R538 million with an estimated
replacement cost of R869 million.
The unitholders' interest equates to 326 cents per unit (2000: 316 cents
per unit) compared to a closing market price of 230 cents per unit at 31
December 2001 (2000: 250 cents per unit). Units were therefore trading at a
29% discount. The market capitalisation of Cenprop as at 31 December 2001
was R376 million.
46% of the shares in the fund were traded over the course of the year,
while 34% and 27% were traded in 2000 and 1999 respectively.
4. Funds
Cenprop's financial resources continue to be fully invested in line with its
policy of planned refurbishment and extension to its property portfolio.
5. Outlook
Completion of the second phase of the refurbishment to The Mall of Rosebank
will result in a considerable increase in income and an improvement to the
tenant mix during 2002. Agreements have been concluded, mainly with national
retailers, in terms of which The Mall will be fully let by 1 May 2002.
The agreement of lease with Arthur Andersen at Against this, the vacancies
at Innes Chambers and Andersen Park referred to above, could have a
significant negative impact on income
All things taken into account, it is likely that there will be some
further reduction in income in 2002 from the portfolio in its current form.
6. Annual report
Cenprop's annual report will be posted to unitholders on or about 1 March
2002.
DIVIDEND DECLARATION
Notice is hereby given of the declaration of Dividend No. 45 in respect of
the income distribution period 1 July 2001 to 31 December 2001. The dividend
amounts to 16,23 cents per unit. Unitholders are advised that the last day
to trade cum dividend will be Friday 22 February 2002. The units will trade
ex-dividend as from Monday 25 February 2002. The record date will be Friday
1 March 2002 and the payment date will be Monday 4 March 2002. Unitholders
may not dematerialise or rematerialise their units between Monday 18
February 2002 and Friday 1 March 2002, both days inclusive.
On behalf of the Board
JHI Real Estate Limited
Secretaries 6 February 2002
CAPITAL
1. Income
Income available for distribution is 31,74 cents per unit (2000: 33,5
cents). While net rental income increased by 11,8%, interest earnings were
substantially lower, largely as a result of the change in the basis of
accounting to discontinue capitalising interest and expenses at Capital Hill
Commercial Estate.
Allowing for the interim dividend of 16,32 cents per unit (2000: 16,51
cents) a final dividend of 15,42 cents per unit (2000: 16,99 cents) will be
distributed at the beginning of March 2002.
2. Portfolio update
Management has continued the process of disposing of certain properties
which no longer meet the Fund's investment criteria, and using such funds to
acquire more appropriate, better performing properties.
In line with this philosophy, Lot 11 Pineside Road in Pinetown was sold
at the end of July for R11 million at a yield of 15%.
The sale of two properties located in Cape Town were also concluded
during the course of the year. Erf 117 Roggebaai, an office building in the
Cape Town central business district was sold at the end of August for R4,1
million at a yield of 14,6%. Futura 15, a complex of mid-sized industrial
units situated in Retreat, was sold for R4,9 million at a yield of 14,6%.
The proceeds from these sales were used to acquire Hutton Court in Hyde
Park for a purchase consideration of R26,4 million. This property is a 5000
m2 office development with a ground floor retail component enjoying the
advantage of prominent exposure to Jan Smuts Avenue. Hutton Court continues
to benefit from high occupancy levels with the majority of the existing
tenants having a history of established tenure at the property.
Stand 77, the fund's development located at Capital Hill Commercial
Estate, Midrand which was covered by an initial one year head lease during
2001, has been let subsequent to the year-end. The complex consists of five
warehouse units totalling 5000 m2 and the entire property is to be tenanted
by Cell C for a five-year period commencing in March 2002.
3. Portfolio valuation
During December 2001, the entire portfolio was valued by JHI Real Estate
Limited.
The unitholders' interest equates to 253 cents per unit (2000: 255 cents
per unit) compared to a closing market price of 240 cents per unit at 31
December 2001 (2000: 240 cents per unit). Units were therefore trading at a
5% discount. The market capitalisation of Capital as at 31 December 2001 was
R352 million.
10% of Capital's units traded during the year (2000: 24%).
4. Funds
At 31 December 2001 the fund's capital account reflected a balance of R1,4
million.
5. Outlook
Rental levels in older industrial areas continue to be under pressure with
tenants demanding shorter lease periods and lower rentals. Where
appropriate, management has been proactive in renewing leases well prior to
their expiry in order to achieve longer periods of tenure, albeit at lower
rentals. This process is considered preferable to the risk of allowing
properties to become vacant in areas where there is low demand.
While the income flowing from the purchase of Hutton Court is a positive
factor, this will not be sufficient to offset the negative factors referred
to above. Thus income for 2002 from the portfolio as presently constituted,
is unlikely to achieve current levels.
6. Annual report
Capital's annual report will be posted to unitholders on or about 1 March
2002.
DIVIDEND DECLARATION
Notice is hereby given of the declaration of Dividend No. 37 in respect of
the income distribution period 1 July 2001 to 31 December 2001. The dividend
amounts to 15,42 cents per unit. Unitholders are advised that the last day
to trade cum dividend will be Friday 22 February 2002. The units will trade
ex-dividend as from Monday 25 February 2002. The record date will be Friday
1 March 2002 and the payment date will be Monday 4 March 2002. Unitholders
may not dematerialise or rematerialise their units between Monday 18
February 2002 and Friday 1 March 2002, both days inclusive.
On behalf of the Board
JHI Real Estate Limited
Secretaries 6 February 2002
NEW STRATEGY AND CHANGE TO MANAGEMENT COMPANY SHAREHOLDING
As a consequence of the Management Company's objective of achieving
meaningful representation and input from major unitholders, the shareholding
in Property Fund Managers Limited is in the course of being reconstituted.
In addition, the Board has been strengthened through the appointment of
messrs. Wolf Cesman, Charles Ryan and Marc Wainer, and it is envisaged that
further appointments will follow.
A process of researching and implementing a strategy to enhance the scope
and performance of both Cenprop and Capital has commenced, and unitholders
will be advised of progress in due course.
REGISTERED OFFICE:
1st Floor, JHI House, 11 Cradock Avenue, Corner Baker Street, Rosebank,
2196
PO Box 2100, Parklands, 2121
TRANSFER SECRETARIES:
MERCANTILE REGISTRARS LIMITED,
8th Floor, 11 Diagonal Street, Johannesburg, 2001
PO Box 1053, Johannesburg, 2000
PROPERTY FUND MANAGERS LTD
Co. Reg. No. 1980/009531/06
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