Wrap Text
Final Preliminary Audited Results and Distribution Declaration
Oasis Crescent Property Fund
A property fund created under the Oasis Crescent Property Trust Scheme
registered in terms of the Collective Investment Schemes Control Act
(Act 45 of 2002) having REIT status with the JSE
Share code: OAS
ISIN: ZAE000074332
(“Oasis” or “the Fund”)
FINAL PRELIMINARY AUDITED RESULTS AND DISTRIBUTION DECLARATION
The directors of Oasis Crescent Property Fund Managers Limited (“OCPFM” or
“the Manager”), the management company of the Fund, present the
preliminary audited results of the Fund for the year ended 31 March 2015
as follows:
Statement of financial position as at 31 March 2015
Audited Audited
2015 2014
R’000 R’000
Assets
Non-current assets 842 520 720 209
Investment properties 453 843 427 201
Property, plant and equipment 467 331
Straight-line lease accrual 8 212 6 650
Available-for-sale financial assets 379 998 286 027
Current assets 88 429 67 020
Trade receivables 2 211 5 376
Other receivables 6 422 5 794
Trade receivables from related parties 110 302
Straight-line lease accrual 2580 1 699
Financial assets at fair value
through profit or loss 53 414 40 714
Other short-term financial assets 5 194 -
Cash and cash equivalents 18 498 13 135
Total assets 930 949 787 229
Unitholders’ funds and liabilities
Unitholders’ funds 894 737 757 169
Capital of the Fund 542 565 504 663
Retained income 5 375 2 438
Other reserves 346 797 250 068
Current liabilities 36 212 30 060
Trade payables 7 597 7 400
Accruals 234 784
Other payables 1 601 1 526
Trade payables to related parties 701 594
Unitholders for distribution 25 173 19 409
Non-permissible income available for
dispensation 906 347
Total unitholders’ funds and
liabilities 930 949 787 229
Supplemental information
Net asset value (“NAV”) (per unit) 1 919 cents 1 706 cents
Statement of comprehensive income for the year ended 31 March 2015
Audited Audited
2015 2014
R’000 R’000
Income 84 607 56 801
Revenue 65 668 54 042
Income from investments excluding non-
permissible income 16 495 12 168
Straight-lining of lease income 2 444 (9 409)
Expenses 32 851 26 806
Property expenses 28 165 22 859
Service charges 3 643 2 970
Other operating expenses 1 043 977
Net income from rentals and
investments 51 756 29 995
Fair value adjustment to investment
properties excluding straight-
lining of lease income 18 189 24 585
Fair value adjustment to investment
properties 20 633 15 176
Reversal of straight lining lease accrual - 5 709
Straight-lining of lease income (2 444) 3 700
Operating profit for the year 69 945 54 580
Net non-permissible investment income 362 203
Operating profit including non-permissable
income 70 307 54 783
Non-permissable income dispensed (713) -
Net profit for the year 69 594 54 783
Other comprehensive income
Items that may subsequently be
reclassified to profit or loss 76 096 36 211
Fair value gain on available-for-sale
financial assets 77 115 36 211
Realised fair value gain reclassified to
profit or loss (1 019) -
Total comprehensive income for
the year 145 690 90 994
Basic earnings per unit (cents) 152.3 124.1
Supplementary Information:
Distribution per unit including 102.3 87.2
non-permissible income
Additional information:
Headline earnings and distributable income
reconciliation
Basic earnings before non-permissable
income adjustment 69 945 54 580
Non-permissible investment income 362 203
Basic Earnings after non-permissible
income adjustment 70 307 54 783
Non-permissible income dispensed (713) -
Basic Earnings 69 594 54 783
Adjusted for:
Realised gain on disposal of available-
for-sale financial assets (1 019) -
Fair value adjustment to investment
properties (18 189) (24 585)
Headline earnings 50 386 30 198
Less: Fair value adjustments on financial
assets at fair value through profit or
loss (1 581) (1 129)
Less: Fair value adjustments on tenant
deposits (337) -
Less: Straight-line lease accrual (2 444) 9 409
Distribution income 46 024 38 478
Non-permissible rental income - (704)
Non-permissible investment income - (203)
Distribution income excluding non-
permissible income 46 024 37 571
Basic earnings per unit (cents) 152.3 124.1
Headline earnings and diluted headline
earnings per unit (cents) 110.3 68.4
Distribution per unit including non-
permissible income (cents) 102.3 87.2
Distribution per unit excluding non-
permissible income (cents) 100.7 85.1
Weighted average units in issue 45 680 697 44 130 490
Units in issue at the end of the year 46 630 486 44 406 888
Statement of changes in unitholders’ funds for the year ended 31 March
2015
Capital
of the Other Retained
Fund Reserves income Total
R’000 R’000 R’000 R’000
Balance at 1 April 2013 469 552 198 681 1 309 669 542
Net profit for the year
ended 31 March 2014 - - 54 783 54 783
Other comprehensive income
Fair value gain on
available-for-sale
financial assets - 36 211 - 36 211
Total comprehensive
income for the year
ended 31 March 2014 - 36 211 54 783 90 994
Reinvestment
of distribution 35 715 - - 35 715
Transaction costs for
issue of new units (220) - - (220)
Transfer to non-
distributable reserve - 15 176 (15 176) -
Distribution received
in advance (384) - 282 (102)
Distribution to
unitholders - - (37 853) (37 853)
Dispensation of non-
permissible income - - (907) (907)
Balance at 31 March 2014 504 663 250 068 2 438 757 169
Net profit for the year
ended 31 March 2015 - - 69 594 69 594
Other comprehensive
income
Fair value gain on
available-for-sale
financial assets - 76 096 - 76 096
Total comprehensive
income for the year
ended 31 March 2015 - 76 096 69 594 145 690
Reinvestment of
distribution 38 751 - - 38 751
Transaction costs for
issue of new units (173) - - (173)
Transfer to non-
distributable reserve - 20 633 (20 633) -
Distribution received
in advance (676) - 676 -
Distribution to
unitholders - - (46 700) (46 700)
Balance at 31 March 2015 542 565 346 797 5 375 894 737
Statement of cash flows for the year ended 31 March 2015
Audited Audited
2015 2014
R’000 R’000
Cash flows from operating activities
Net profit for the period 69 594 54 783
Adjusted for:
Non-permissible investment income received (362) (203)
Depreciation 109 35
Provision for receivables impairment 2 565 (34)
Straight-line lease accrual (2 444) 3 700
Lease incentives 605 910
Reversal of straight-line lease accrual - 5 709
Realised gain on sale of financial assets at
fair value through profit or loss (1 019) (270)
Fair value adjustment on financial assets
at fair value through profit or loss (1 919) (1 129)
Fair value adjustment to investment
properties excluding straight-lining of
lease income (18 189) (24 585)
Net operating cash flow before changes in
working capital 48 940 38 916
Decrease/(increase) in current assets
Trade receivables 600 (3 415)
Other receivables (628) (2 357)
Trade receivables from related parties 192 (302)
(Decrease)/increase in current liabilities
Trade payables 197 3 548
Accruals (550) (121)
Other payables 75 174
Trade payables to related parties 107 138
Cash generated from operations 48 933 36 581
Non-permissible investment income received 362 203
Unitholders for distribution (2 185) (1 333)
Non-permissible income 559 (345)
Net cash inflow from operating activities 47 669 35 106
Cash flows from investing activities
Acquisition of available-for-sale
financial assets (27 499) (8 861)
Acquisition of financial assets at fair
value through profit or loss (30 248) (6 300)
Acquisition of property, plant and equipment (245) (217)
Additions to investment properties (9 058) (10 119)
Lease incentives paid - (13 173)
Acquisition of short-term financial assets (16 008) -
Proceeds from disposal of available-for-sale
financial assets 10 643 -
Proceeds from sale of financial assets
at fair value through profit or loss 30 282 11 472
Net cash outflow from investing activities (42 133) (27 198)
Cash flows from financing activities
Distribution received in advance - (102)
Transaction cost (173) (220)
Net cash outflow from financing
activities (173) (322)
Net increase in cash and
cash equivalents 5 363 7 586
Cash and cash equivalents
At the beginning of the year 13 135 5 549
At the end of the year 18 498 13 135
Segmental information for the year ended 31 March 2015
Indus- Invest- Cor-
Retail Offices trial ments porate Total
R’000 R’000 R’000 R’000 R’000 R’000
Segment revenue
Property income
Rental and
related income 18 731 9 490 19 985 - - 48 206
Recoveries 10 290 3 446 3 726 - - 17 462
Income from
investments
excluding non-
permissible
income
Dividend income
offshore - - - 9 838 - 9 838
Permissible
investment
income -
domestic - - - 3 720 - 3 720
29 021 12 936 23 711 13 558 - 79 226
Segment expenses
Property
expenses 16 268 4 369 7 528 - - 28 165
Service charges - - - - 3 643 3 643
Other operating
expenses - - - - 1 043 1 043
16 268 4 369 7 528 - 4 686 32 851
Segment result
Operating
profit/(loss) 12 753 8 567 16 183 13 558 (4 686) 46 375
Net finance
income
Interest received - - - - 362 362
NPI Dispensed (351) - - - (362) (713)
Net profit/(loss)
before
straight-line
lease income
and fair value
change 12 402 8 567 16 183 13 558 (4 686) 46 024
Realised gain on sale
of available for sale
financial assets - - - 1 019 - 1 019
Fair value adjustment
to financial assets at
fair value through
profit and loss - - - 1 918 - 1 918
Straight-lining
of lease
income 1 151 - 1 293 - - 2 444
Fair value
adjustment to
investment
properties 3 438 1 402 13 349 - - 18 189
Net profit/(loss)
after
straight-line
lease income
and fair
value change
to investment
properties 16 991 9 969 30 825 16 495 (4 686) 69 594
Segment assets
Investment
properties 181 257 97 378 175 208 - - 6453 843
Property, plant
and equipment 419 48 - - - 467
Straight-line
lease accrual
non-current 3 615 - 4 597 - - 8 212
Straight-line
lease accrual
current 491 - 2 089 - - 2 580
Available-for-
sale financial
assets - - - 379 998 - 378 998
Other short term assets 2 556 - 2 638 - - 5 194
Trade receivables 1 445 326 440 - - 2 211
Trade receivables
from related
parties - - - - 110 110
Other receivables 335 - 1 971 3 526 590 6 422
Financial assets
at fair value
through profit
or loss - - - 53 414 - 53 414
Cash and cash
equivalents - - - 18 498 - 18 498
190 118 97 752 186 943 455 436 700 930 949
Segment
liabilities
Trade payables 3 420 790 3 387 - - 7 597
Accruals 73 5 30 - 126 234
Other payables 727 - 234 - 640 1 601
Trade payables
to related
parties 125 - 52 - 524 701
Unitholders for
distribution - - - - 25 173 25 173
Non-permissible
income
available for
dispensation - - - - 906 906
4 345 795 3 703 - 27 369 36 212
Net current segment
assets/(liabilities) 482 (469) 3 433 75 438 (26 667) 52 217
Capital
expenditure 5 166 384 3 508 - - 9 058
Segmental information for the year ended 31 March 2014
Indus- Invest- Cor-
Retail Offices trial ments porate Total
R’000 R’000 R’000 R’000 R’000 R’000
Segment revenue
Property income
Rental and
related income 26 718 11 761 15 563 - - 54 042
Income from
investments
excluding non-
permissible
income
Dividend income
offshore - - - 7 426 - 7 426
Permissible
investment
income -
domestic - - - 3 343 - 3 343
Fair value
adjustment to
financial
assets at fair
value through
profit or loss - - - 1 129 - 1 129
26 718 11 761 15 563 11 898 - 65 940
Segment expense
Property
expenses 15 756 3 881 4 062 - (840) 22 859
Service charges - - - - 2 970 2 970
Other operating
expenses - - - - 977 977
15 756 3 881 4 062 - 3 107 26 806
Realised gain on
available-for-
sale financial
assets - - - 270 - 270
Segment result
Operating
profit/(loss) 10 962 7 880 11 501 12 168 (3 107) 39 404
Net finance
income
Interest received - - - - 203 203
Reversal of
straight line
accrual (5 709) - - - - (5 709)
Net profit/(loss)
before
straight-line
lease income
and fair value
change to
investment
properties 5 253 7 880 11 501 12 168 (2 904) 33 898
Straight-lining
of lease
income (4 794) 89 1 005 - - (3 700)
Fair value
adjustment to
investment
properties 12 628 3 709 8 248 - - 24 585
Net profit/(loss)
after
straight-line
lease income
and fair
value change
to investment
properties 13 087 11 678 20 754 12 168 (2 904) 54 783
Segment assets
Investment
properties 173 703 95 341 158 157 - - 427 201
Property, plant
and equipment 270 61 - - - 331
Straight-line
lease accrual
non - current 2 409 - 4 241 - - 6 650
Straight-line
lease accrual
current 546 - 1 153 - - 1 699
Available-for-
sale financial
assets - - - 286 027 - 286 027
Trade receivables 1 600 551 3 225 - - 5 376
Other receivables 290 111 1 958 1 412 2 023 5 794
Financial assets
at fair value
through profit
or loss - - - 40 714 - 40 714
Trade receivables
from related
parties - - - - 302 302
Cash and cash
equivalents - - - 13 135 - 13 135
178 818 96 064 168 734 341 288 2 325 787 229
Segment
liabilities
Trade payables 3 180 565 3 655 - - 7 400
Accruals 8 - 547 - 229 784
Other payables 648 2 226 - 650 1 526
Trade payables
to related
parties 193 11 84 - 306 594
Unitholders for
distribution - - - - 19 409 19 409
Non-permissible
income
available for
dispensation - - - - 347 347
4 029 578 4 512 - 20 941 30 060
Net current
assets (1 593) 84 1 824 55 261 (18 616) 36 960
Capital
expenditure 1 361 823 7 935 - - 10 119
Commentary
Basis of preparation and accounting policies
The preliminary financial statements are prepared in accordance with the
requirements of the JSE Limited Listings Requirements (“Listings
Requirements”) for preliminary reports. The Listings Requirements require
preliminary reports to be prepared in accordance with the framework
concepts and the measurement and recognition requirements of International
Financial Reporting Standards (IFRS) and the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by the Financial Reporting Standards Council and
to also, as a minimum, contain the information required by IAS 34 Interim
Financial Reporting and the Collective Investment Schemes Control Act of
2002. The accounting policies applied in the preparation of the financial
statements from which the preliminary financial statements were derived
are in terms of International Financial Reporting Standards and are
consistent with those accounting policies applied in the preparation of
the previous annual financial statements.
The non-permissible income is dispensed to the Oasis Crescent Fund Trust
which is a registered public benefit organisation. The accounting policies
are consistent with those applied in the most recent annual financial
statements of the Fund.
The financial statements are prepared on the historical cost basis as
modified by the revaluation of investment properties, financial assets at
fair value through profit or loss and available-for-sale financial assets.
PricewaterhouseCoopers Inc. has audited the financial information set out
in this report. Their unqualified audit report is available for inspection
at the Fund’s registered office.
These preliminary audited results were compiled by Michael Swingler
CA(SA).
Any reference to the future financial performance of the Fund contained in
this announcement has not been reviewed or reported on by the Fund’s
auditors.
Property portfolio valuation(Rm) 465 436
Investment in Offshore Listed Properties (Rm) 345 267
Investments in Local Listed Properties and other
current assets(Rm) 44 30
Cash and cash equivalents (Rm) 77 54
Net asset value per unit (cents) 1 919 1 706
Listed market price at year end (cents) 1 750 1 500
Movement in investment properties:
Carrying value at the beginning of the year 427 201 380 592
Additions 9 058 10 119
Acquisition of lease incentive asset (605) 11 905
Fair value adjustment to investment properties
excluding straight-lining of lease income 18 189 24 585
Revaluation 20 633 15 176
Reversal of straight lining lease accrual - 5 709
Change in straight-line lease accrual (2 444) 3 700
Carrying value at the end of the year 453 843 427 201
During the previous year, the Fund replaced a material lease with a new
lease with the same tenant, resulting in a realisation of the accrued
lease straight-line asset.
The valuation of investment properties includes discounted cash flow and
net income capitalisation, using contracted rental income and other cash
flows. Capitalisation rates used in the valuations are the most recent
rates published by the South African Property Owners Association (SAPOA).
The principal assumptions underlying estimation of fair value are those
related to the receipt of contractual rentals, expected future market
rentals, void periods ranging from 0% to 5%, maintenance requirements and
appropriate discount rates. These valuations are regularly compared to
actual market yield data, actual transactions by the Fund and those
reported by the market. Valuations were carried out as at 31 March 2015 by
Mills Fitchet Magnus Penny, an independent, professional valuer registered
without restriction in terms of the Property Valuers Act No. 47 of 2000.
The valuation of investment properties requires judgement in the
determination of future cash flows and an appropriate capitalisation rate
which varies between 6.75% and 13% (2014: 8.3% and 13%). Changes in the
capitalisation rate attributable to changes in market conditions can have
a significant impact on property valuations. The valuation of investment
properties may also be influenced by changes in vacancy rates.
Fair value estimation:
Effective 1 April 2013, the Fund adopted IFRS 13 for financial instruments
that are measured in the statement of financial position at fair value
which requires disclosure of fair value measurements by level of the
following fair value measurement hierarchy:
- Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1).
- Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (level 2).
- Inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs) (level 3).
The following table presents the Fund's assets and liabilities that are
measured at fair value at 31 March 2015:
Assets Level 1 Level 2 Level 3 Total
R'000 R'000 R'000 R'000
Available-for-sale financial
assets
Investment in Oasis Crescent
Global Property Equity Fund - 342 789 - 342 789
Investment in listed property
funds 35 210 - - 35 210
Investment in Oasis Crescent
International Property Equity
Feeder Fund - 1 999 - 1 999
Financial assets at fair value
through profit or loss
Investment in Oasis Crescent
Income Fund - 53 414 - 53 414
Other short-term financial assets - 5 194 - 5 194
Investment property
Investment property
- - 453 843 453 843
The following table presents the Fund's assets and liabilities that are
measured at fair value at 31 March 2014:
Assets Level 1 Level 2 Level 3 Total
R'000 R'000 R'000 R'000
Available-for-sale financial assets
Investment in Oasis Crescent Global
Property Equity Fund - 265 102 - 265 102
Investment in listed property funds 18 681 - - 18 681
Investment in Oasis Crescent
International Property Equity Feeder
Fund - 2 244 - 2 244
Financial assets at fair value through
profit or loss
Investment in Oasis Crescent Income
Fund - 40 714 - 40 714
Investment property
Investment property 427 201 427 201
The fair value of financial instruments traded in active markets is based
on quoted market prices at the statements of financial position date. A
market is regarded as active if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing
service, or regulatory agency, and those prices represent actual and
regularly occurring market transactions on an arm's length basis. These
instruments are included in level 1.
The instruments included in level 2 comprises of Irish stock exchange
property equity investments classified as available-for-sale and
investments in Shari'ah compliant instruments classified as financial
assets at fair value through profit or loss. The fair value of financial
instruments that are not traded in an active market is determined by using
valuation techniques. These valuation techniques maximise the use of
observable market data where it is available and rely as little as
possible on entity specific estimates. If all significant inputs required
to fair value an instrument are observable, the instrument is included in
level 2. If one or more of the significant inputs is not based on
observable market data, the instrument is included in level 3.
Specific valuation techniques used to value financial instruments include:
Available-for-sale financial assets
Oasis Crescent Global Property Equity Fund:
The fair value of investments in the Oasis Crescent Global Property Equity
Fund is determined using the closing Net Asset Value (NAV) price published
by Oasis Global Management Company (Ireland), the management company of
the fund, and listed on the Irish Stock Exchange. The shares are not
actively traded on the Irish Stock Exchange and are therefore not included
in Level 1.
Investment in listed property funds
The fair value of these investments is determined using the closing bid
price as at statement of financial position date. These shares are listed
and traded on the JSE Stock Exchange and are therefore classified as Level
1.
Financial assets at fair value through profit or loss
Oasis Crescent Income Fund
The fair value of investments in Oasis Crescent Income Fund is determined
using the closing Net Asset Value (NAV) price published by Oasis Crescent
Management Company Ltd., the management company of the fund. These
investments are not actively traded on an exchange and are therefore not
classified as Level 1.
INTRODUCTION
The Fund is a well diversified REIT invested in South African direct and
listed property investments and high quality global listed REITS. The Fund
has a strong balance sheet with no debt and substantial reserves which
provide flexibility to take advantage of opportunities.
The objective of the Manager is to protect and grow the real wealth of
investors by providing sustainable growth in net asset value and delivering
a consistent income stream that has potential to grow. Our focused approach
has delivered significant real wealth for investors with an annualised total
unitholder return of 13.5% relative to annualised inflation of 5.9% since
inception, outperforming inflation by an average of 7.6% per annum. The
Fund’s annualised total intrinsic value return is 14.3% per annum since
inception.
Figures in %
Cumulative returns FY2011 FY2012 FY2013 FY2014 FY2015 Since
Inception
Unitholder return 89.3 104.2 125.9 165.3 227.3 227.3
Intrinsic value 101.5 124.1 161.0 194.6 248.7 248.7
return
Inflation 39.0 47.3 56.0 65.2 71.7 71.7
Annual Returns FY2011 FY2012 FY2013 FY2014 FY2015 Since
Inception
Unitholder return 12.5 7.8 10.7 17.4 23.4 13.5
Intrinsic value 11.3 11.2 16.4 12.9 18.4 14.3
return
Inflation 4.1 6.0 5.9 5.9 3.9 5.9
NAV 1 376 1 439 1 587 1 706 1 919
Market Price 1 290 1 300 1 350 1 500 1 750
MARKET OVERVIEW
There is positive net absorption of space due to demand being greater than
supply in the majority of the global property markets. The US is leading the
developed markets in terms of converting this net absorption into higher
occupancy and positive rental reversion. As bond yields normalise over the
medium term, stock selection will become increasingly important and REITS
with stronger rental growth, enhancing property developments and superior
balance sheets are well positioned to outperform. In South Africa, new
shopping centre developments are expected to decline in 2015 and the demand
from national food and fashion tenants remain reasonable for proven retail
locations. Demand in the office sector is linked to confidence and
employment which is going to take time to recover. In the industrial sector,
the demand for logistics space remains solid and the vacancies are low while
the environment for manufacturing space is less favorable. SA REITS are
currently delivering a yield of 5.4% relative to the SA 10yr bond yield of
7.7% and higher bond yields are a risk but SA REITS are expected to deliver
7-8% income growth per annum over the medium term.
PORTFOLIO OVERVIEW
FY2015 FY2014 FY2013
R'mil % R'mil % R'mil %
Direct Property 465 50 436 55 398 57
Cash, SA
Investments and
other 121 13 84 11 76 11
Global Investments 345 37 267 34 221 32
Total Assets 931 100 787 100 695 100
The Fund has focused on building a portfolio with a combination of high
quality direct property investments and global listed REITS with properties
located in the major global cities, which adds geographic and currency
diversification. The direct property portfolio includes exposure to the
retail, industrial and office sectors and it has a high exposure to the
Western Cape. In order to attract world class tenants, there is continuous
investment in and maintenance of the direct properties. The global
investments consist of the Oasis Crescent Global Property Equity Fund which
is well positioned with a focus on REITS with the best quality assets and
balance sheets. The cash and other listed SA investments provide flexibility
for the Fund to pursue growth opportunities.
REVIEW OF RESULTS AND OPERATIONS
Highlights
- Distribution per unit increased by 18.3% to 100.7 cents per unit (FY2014:
85.1 cents)
- Net asset value per unit increased by 12.5% to 1 919 cents per unit (FY2014:
1 706 cents)
- Benefit from active asset management and refurbishment of properties
- Intrinsic value return of 14.3% per annum since inception compared to
inflation of 5.9% per annum
FY2015 FY2014 FY2013
Distribution per unit including non-
permissible income (cents) 102.3 87.2 89.2
Distribution per unit excluding non-
permissible income (cents) 100.7 85.1 88.7
Property portfolio valuation (R’mil) 465 436 398
Investments in offshore listed
Properties (R’mil) 345 267 221
Investments in Local Listed
Properties and other current assets
(R’mil) 44 30 26
Cash and cash equivalents (R mil) 77 54 50
Net asset value per unit (cents) 1 919 1 706 1 587
Listed market price at year end
(cents) 1 750 1 500 1 350
FY2015 FY2014 FY2013 2015/2014 2015/2013
%
(R'000) (R'000) (R'000) % annualised
Direct
property net
income 37 153 30 479 30 844 22 10
Global 9 838 7 426 5 911
Investment 32 29
Income
Cash and Local
Investment
Income 3 720 3 410 3 453 9 4
Shared expense (4 686) (3 744) (3 588) 25 14
Distributable
Income excl
NPI 46 024 37 571 36 620 22 12
During this period, the Fund benefited from the active asset management and
successful refurbishment of portfolio properties which resulted in solid
growth in rentals and property expense recoveries. The investment income
earned from the global investments benefited from the weaker Rand while the
investment income from the SA listed investments was lower due to the timing
of dividend income as a result of the normal asset management process. The
higher service charge expense is due to the increase in the market
capitalisation of the Fund. The weighted average units in issue increased
due to a high proportion of unitholders electing to reinvest their dividends
in additional units.
The increase in the average rental per square meter in the Segmental Profile
below is due to annual escalation and the positive impact from the
successful leasing results over the period. The Fund continues with
implementation of its leasing strategy which includes lease expiries for
2016 and further improvements in the quality of the tenant mix.
Revenue Revenue
Rentable Area FY2015 FY2014
Area (m²) % (R'mil) % (R'mil) %
Western Cape 74 718 82 40.3 61 31.0 56
KwaZulu-Natal 16 043 18 26.0 39 24.0 44
Total - Direct Property (excl
straight lining) 90 761 100 66.3 100 55.0 100
Note: Revenue includes recoveries and excludes leasing incentives
Segmental Profile
FY 2015 FY2014
Average Average Average Average
rental per rental rental per rental
Segment Rentable area
m² for the escalatio m² for the escalation
period n per period per
(m²) (m²) (m²) (%) (m²) (m²) (%)
Retail 18 764 117 8 106 8
Office 6 608 125 9 114 9
Industri
al 65 389 26 8 25 8
TOTAL 90 761
Vacancy Profile
% of total rentable area FY2015 FY2014
Retail 1.7 1.8
Office 0 0
Industrial 0 0
1.7 1.8
Note: This relates only to the Direct Property Portfolio
Lease expiry profile
FY 2015 FY2014
Rental Area Revenue Rental Area Revenue
% % % %
- Within 1 year 29 43 5 13
- Within 2 year 34 23 34 44
- Within 3 year 3 3 25 9
- Within 4 year 1 3 3 2
- Within 5 year or more
years 33 28 33 32
100 100 100 100
Post the financial year-end, leases have been renewed for 1% of the total
rentable area and new leases have been concluded for 1% of the total
rentable area.
Tenant Profile
FY 2015 FY2014
(%) (%)
A - Large Nationals, large listed, large franchisees,
multi-nationals and government 72 71
B - Nationals, listed, franchisees and medium to large
professional firms 18 18
C - Other 10 11
TOTAL 100 100
Note: Tenants are classified as large or major (“A” grade) or medium to
large (“B” grade) based on their financial soundness, profile and global or
national footprint.
Investment Portfolio Characteristics
The investment in high quality global listed REITS provide geographic and
sector diversification and with Global REIT cash flow and dividend yields
remaining attractive relative to bond yields, the Oasis Crescent Global
Property Equity Fund is well positioned. The average cash flow yield of the
fund is 5.4% and the dividend yield is 4.4% which continues to offer value
relative to the average bond yield and inflation of 1.8% and 0.6%
respectively. The Fund invests its liquid reserves in the Oasis Crescent
Income Fund which provides competitive, Shariah compliant income and
flexibility to take advantage of opportunities.
OUTLOOK
The Fund will focus on renewing existing leases and further improving the
tenant quality while continuing to invest in its properties. The accumulated
cash and liquid reserves provide the flexibility to take advantage of
opportunities. The global investments will continue to provide
diversification benefits to investors and will remain a unique
characteristic of the Fund. Management are confident in the strategy of the
Fund.
ADDITIONAL INFORMATION
Property management
Property management is outsourced to the Manager and external service
providers. The amount paid to the Manager was R1.11 million (FY2014: R0.92
million)
Service charge
The service charge is equal to 0.5% per annum of the Fund’s market
capitalization and borrowing facilities based on the average daily closing
prices of the units. The amount paid to the Manager was R3.64 million
(FY2014: R3.00 million)
Units in issue
As at 31 March 2015 the number of units in issue was 46,630,486 (FY2014:
44,406,888)
Unitholders holding more than 5% of issued units as at 31 March
2015:
NUMBER OF HOLDING
NAME UNITS (%)
Oasis Crescent Balanced Progressive
Fund of Funds 10 972 082.00 23.5
Oasis Crescent Balanced Stable Fund
of Funds 4 461 512.00 9.6
Oasis Crescent Property Company
Proprietary Limited 4 042 786.00 8.7
Oasis Crescent Retirement Annuity
High Equity Fund 3 343 785.00 7.2
Oasis Crescent Pension Annuity
Stable Fund 2 919 489.00 6.3
BNP Paribas Securities London 2 744 944.00 5.9
Oasis Crescent Balanced High Equity
Fund of Funds 2 623 221.00 5.6
Oasis Crescent Income Fund 2 322 572.00 5.0
TOTAL 71.8
Shareholding in OCPFM
OCPFM is 100% owned by Oasis Group Holdings Proprietary Limited (“Oasis
Group Holdings”).
Related party transactions and balances
OCPFM is the management company of the Fund in terms of the Collective
Investment Schemes Control Act.
Oasis Group Holdings is a tenant at The Ridge@Shallcross and the parent of
the Manager.
As disclosed in the prospectus of Oasis Crescent Global Property Equity
Fund a management fee is charged for investing in the Oasis Crescent
Global Property Equity Fund by Oasis Global Management Company (Ireland)
Limited, the manager of the aforesaid fund.
As disclosed in the prospectus of the Oasis Crescent Income Fund, no
management fee is charged for investing in the Oasis Crescent Income Fund
by Oasis Crescent Management Company Limited, the manager of the aforesaid
fund.
Abli Property Developers Proprietary Limited renders property development
consulting services to the Fund on capital development projects.
There are common directors to the Manager, Oasis Group Holdings, Oasis
Global Management Company (Ireland) Limited and Oasis Crescent Management
Company Limited. Transactions with related parties are executed on terms
no less favourable than those arranged with third parties.
Type of related party transactions
The Fund pays a service charge and a property management fee on a monthly
basis to OCPFM.
Related party transactions
2015 2014
R’000 R’000
Service charge paid to OCPFM 3 643 2 970
Property management fees paid to OCPFM 1 112 921
Other service charges paid to OCPFM - 32
Rental and related income from Oasis Group
Holdings Proprietary Limited at The
Ridge@Shallcross 413 415
Consulting fees paid to Abli Property Developers
Proprietary Limited for consulting services on
capital projects 197 356
Related party balances
Trade receivables from Oasis Group Holdings 110 302
Trade payables to Abli Property Developers
Proprietary Limited (4) (39)
Trade payables to Oasis Group Holdings (39) (142)
Trade payables to OCPFM (658) (413)
(591) (292)
Declaration announcement in respect of distribution for the 6 months ended
31 March 2015
Notice is hereby given that an income distribution for the six-month
period ended 31 March 2015 has been approved and declared of 5 170.23707
cents (in aggregate), after non-permissible income, for every 100 (one
hundred) units so held, to unitholders recorded in the register of the
Fund at close of business on Friday, 5 June 2015. Unitholders may elect to
receive the distribution in cash or to reinvest the distribution by the
purchase of new units at a rate of 2.69454 units at 1 918.78 cents per
unit (in aggregate), for every 100 (one hundred) units so held.
Unitholders should take note of the corporate action timetable as set out
below in respect of the abovementioned distribution and the election in
terms thereof.
SALIENT DATES AND TIMES 2015
Declaration announcement on SENS of distribution Monday, 4 May
and right of election to purchase new units or
receive a cash payment
Finalisation announcement on SENS in respect of Wednesday, 13 May
distribution and right of election to purchase
new units or receive a cash payment
Circular and form of election posted to Wednesday, 13 May
unitholders
Last day to trade in order to be eligible for the Friday, 29 May
distribution
Trading commences ex-entitlement to the Monday, 1 June
distribution
Listing of maximum possible number of units that Wednesday, 3 June
may be purchased at commencement of trade on
Closing date for the election of cash Friday, 5 June
distribution at 12:00 pm on
Record date for the distribution Friday, 5 June
Cash distribution cheques posted and CSDP/broker Monday, 8 June
accounts updated with cash
Unit certificates posted and CSDP/broker accounts Wednesday, 10 June
updated with units
Announcement of the results of the distribution Wednesday, 10 June
on SENS
Adjustment of number of new units listed on or Friday, 12 June
about
Notes:
1. Unitholders reinvesting their distribution in new units are alerted
to the fact that the new units will be listed 3 business days after
the last day to trade and that these new units can only be traded 3
business days after the last day to trade, due to the fact that
settlement of the units will be 3 business days after the record
date, which differs from the conventional one business day after the
record date settlement process.
2. Units may not be dematerialised or rematerialised between Monday, 1
June 2015 and Friday, 5 June 2015, both days inclusive.
3. The above dates and times are subject to change. Any changes will be
announced on SENS.
4. All times quoted in the circular are South African times.
5. Dematerialised unitholders should provide their CSDP or broker with
their election instructions by the cut-off time stipulated in terms
of their custody agreement with such CSDP or broker.
6. If no election is made, the distribution accrued to the unitholder
will be used to purchase additional units.
Tax implications
For taxation purposes, the Fund is a REIT as defined in the Income Tax
Act, Act 58 of 1962 (“the Income Tax Act”), as from 01 April 2013 and,
accordingly, the tax implications of the distribution have changed as from
that date. The distribution will not be exempt from income tax in terms of
section 10(1)(k) of the Income Tax Act.
For South African tax residents, the distribution will be exempt from
dividends tax in terms of section 64F(l) of the Income Tax Act, provided
that you, as unitholder, provide the transfer secretary or your nominee,
custodian or CSDP with confirmation of your tax residence status in the
prescribed form. If you do not provide the required residence status, they
will have no choice but to withhold dividends tax at a rate of 15%.
For non-residents for South African tax purposes, the distribution
received by a non-resident from a REIT will be subject to dividend
withholding tax at 15%, unless the rate is reduced in terms of any
applicable agreement for the avoidance of double taxation (“DTA”) between
South Africa and the country of residence of the unitholder. Non-resident
unitholders that believe that a reduced rate of tax applies in respect of
their applicable DTA should contact the transfer secretary or their
nominee, custodian or CSDP for the prescribed form to record the reduced
rate of tax.
Where dividends tax is withheld at 15% for non-resident unitholders:
- the reinvestment ratio for non-resident unitholders will be 2.29036 units at
1,918.78 cents per unit, for every 100 (one hundred) units held; and
- should such non-resident unitholders elect to receive the distribution in
cash, they will receive 4 394.70151 cents per 100 units held on the record
date of the distribution.
The Income Tax Act sections applicable to the distributions made are as
follows:
Property income distribution from a REIT – section 10(1)(k) and section
64F(l)
Both resident and non-resident unitholders are encouraged to consult their
professional tax advisors with regard to their individual tax liability in
this regard.
A circular will be posted out to unitholders on or about Wednesday, 13 May
2015, in respect of the unit and income distribution.
The number of units in issue at the date of declaration of the aforesaid
distribution is 46 630 486. The Income Tax reference number of the Fund is
3354212148
Changes to the board of directors of the Manager
Mr Ebrahim Mohamed was appointed to the board of directors of the Manager
as an independent non-executive director and as a member of the Audit and
Risk Committee of the Manager with effect from 27 November 2014.
By order of the board
Oasis Crescent Property Fund Managers Limited
Cape Town
4 May 2015
Designated Adviser
PSG Capital Proprietary Limited
Date: 04/05/2015 05:43:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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