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Unaudited condensed consolidated interim financial results for the six months ended 30 June 2022 and cash dividend
SA CORPORATE REAL ESTATE
SA Corporate Real Estate Limited ("the Company") (Incorporated in the Republic of South Africa)
(Registration number 2015/015578/06) Approved as a REIT by the JSE
Share code: SAC
ISIN code: ZAE000203238
Unaudited condensed consolidated interim financial results for the six months ended 30 June 2022 and cash dividend declaration
Introduction
The Company is a JSE-listed Real Estate Investment Trust ("REIT") and together with all its subsidiaries ("the Group" or "SA Corporate") owns a focused portfolio of quality industrial, retail and residential buildings located primarily in the major metropolitan areas of South Africa
with a secondary node in Zambia. As at 30 June 2022, the property portfolio consisted of 160 properties, with 1 365 366m2 of gross lettable area ("GLA"), valued at R15.1 billion, a 50% joint venture ("JV") interest in three Zambian entities with properties valued at R1 131.4 million,
a 90% JV interest in The Falls Lifestyle Estate with property valued at R312.3 million and listed investments valued at R161.9 million.
Overview
Interim distributable income up 5.2% to R362.3 million or 14.41 cps (June 2021: R344.5 million or 13.70 cps)
Total net property income ("NPI") of R594.8 million (June 2021: R589.8 million)
Total like-for-like NPI increased by 7.2% to R588.4 million (June 2021: R548.9 million)
Traditional portfolio vacancies of 2.7% of GLA (June 2021: 3.6%)
Afhco residential portfolio vacancies of 4.0% of total units (June 2021: 8.4%)
Disposal pipeline contracted and still to transfer and divestments transferred since January 2022 R1.3 billion (Transferred to 30 June 2022: R128.8 million; Contracted not yet transferred: R1 134.3 million, of which R317.7 million has transferred after 30 June 2022)
Salient features
The salient features of the Group condensed consolidated interim financial results for the six months ended 30 June 2022, as compared to the six months ended 30 June 2021, are set out below:
Gross rental income of R1 030.1 million (June 2021: R1 055.4 million)
Operating profit of R631.9 million (June 2021: R354.9 million)
Headline earnings per share of 17.55 cents (June 2021: 23.82 cents)
Basic earnings per share of 23.16 cents (June 2021: 11.39 cents)
Net asset value per share of 412 cents (June 2021: 393 cents)
Distribution declared up 26.3% to 12.97 cps at 90% payout ratio (June 2021: 10.27 cps at 75% payout ratio)
Loan to value ("LTV") ratio of 37.9%* (December 2021: 37.4%*)
* Net debt LTV excluding derivatives, which if included would be 37.8% (December 2021: 38.5%)
Distribution declaration and important dates
Notice is hereby given of the declaration of distribution number 14 in respect of the income distribution period 1 January 2022 to 30 June 2022. The payment amounts to 12.96668 cps (June 2021: 10.27368 cps).
The source of the distribution comprises net income from property rentals. Please refer to the Condensed Consolidated Interim Statement of Comprehensive Income for further details. 2 514 732 095 of the Company's shares are in issue at the date of this distribution declaration and the Company's income tax reference number is 9179743191.
Last date to trade cum distribution Tuesday, 18 October 2022
Shares will trade ex-distribution Wednesday, 19 October 2022
Record date to participate in the distribution Friday, 21 October 2022
Payment of distribution Monday, 24 October 2022
Share certificates may not be dematerialised or rematerialised between Wednesday, 19 October 2022 and Friday, 21 October 2022, both days inclusive.
Tax implications
In accordance with the Company's REIT status, shareholders are advised that the distribution meets the requirements of a "qualifying distribution" for the purposes of section 25BB of the Income Tax Act, No 58 of 1962 ("Income Tax Act"). The distributions on the Company's shares will be deemed to be dividends, for South African tax purposes, in terms of section 25BB of the Income Tax Act. The distributions received by or accrued to
South African tax residents must be included in the gross income of such shareholders and are not exempt from income tax (in terms of the exclusion to the general dividend exemption, contained in paragraph (aa) of section 10(1)(k)(i) of the Income Tax Act) because they are dividends distributed by a REIT, with the effect that the distribution is taxable in the hands of the shareholder.
These distributions are, however, exempt from dividend withholding tax in the hands of South African tax resident shareholders, provided that the South African resident shareholders have provided the following forms to their Central Securities Depository Participants ("CSDP") or broker, as the case may be, in respect of uncertificated shares, or the transfer secretaries, in respect of certificated shares:
(a) a declaration that the distribution is exempt from dividends tax; and
(b) a written undertaking to inform the CSDP, broker or the transfer secretaries, as the case may be, should the circumstances affecting the exemption change or the beneficial owner ceases to be the beneficial owner, both in the form prescribed by the Commissioner for the South African Revenue Service.
The Company's shareholders are advised to contact the CSDP, broker or transfer secretaries, as the case may be, to arrange for the above-mentioned documents to be submitted prior to payment of the distribution, if such documents have not already been submitted.
Notice to non-resident shareholders
Distributions received by non-resident shareholders will not be taxable as income and instead will be treated as ordinary dividends which are exempt from income tax in terms of the general dividend exemption in section 10(1)(k)(i) of the Income Tax Act.
Distributions received by a non-resident from a REIT are subject to dividend withholding tax at 20%, 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 shareholder.
Assuming dividend withholding tax will be withheld at a rate of 20%, the net dividend amount due to non-resident shareholders is 10.37334 cents per SA Corporate share. A reduced dividend withholding rate, in terms of the applicable DTA, may only be relied on if the non-resident shareholder has provided the following forms to the CSDP or broker, as the case may be, in respect of uncertificated shares, or the transfer secretaries, in respect of certificated shares:
(a) a declaration that the dividend is subject to a reduced rate as a result of the application of a DTA; and
(b) a written undertaking to inform the CSDP, broker or the transfer secretaries, as the case may be, should the circumstances affecting the reduced rate change or the beneficial owner ceases to be the beneficial owner, both in the form prescribed by the Commissioner for the South African Revenue Service.
Non-resident shareholders are advised to contact the CSDP, broker or the transfer secretaries, as the case may be, to arrange for the above-mentioned documents to be submitted prior to payment of the distribution if such documents have not already been submitted, if applicable.
Short-form notice
The contents of this short-form announcement are the responsibility of the Board of Directors of the Company. Shareholders are advised that this short-form announcement represents a brief summary of the information contained in the full announcement, which is published on https://senspdf.jse.co.za/documents/2022/jse/isse/SACE/ie2022.pdf and on SA Corporate's website https://www.sacorporatefund.co.za/. Any investment decisions by investors and/or shareholders
should be based on a consideration of the full announcement as a whole and shareholders are encouraged to review the full announcement as directed above. Investors and/or shareholders may request copies of the full announcement by contacting the registered office, details of which are set out below. The announcement is available for inspection at the registered office of the Company at no charge during business hours, by prior appointment.
For a more comprehensive analysis of SA Corporate's results and outlook, please refer to https://www.sacorporatefund.co.za/
Johannesburg
15 September 2022
Sponsor: Nedbank Corporate and Investment Banking, a division of Nedbank Limited
DIRECTORATE AND STATUTORY INFORMATION
Registered office
GreenPark Corner
16th Floor, Corner Lower Road and West Road South, Morningside Johannesburg, 2196
Tel 010 020 2530
Registered auditors
PricewaterhouseCoopers Inc.
5 Silo Square, V&A Waterfront, Cape Town, 8002
Transfer secretaries
Computershare Investor Services Proprietary Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
135 Rivonia Road, Sandton, 2196
Directors
MA Moloto (Chairman)
OR Mosetlhi (Lead Independent Director)
TR Mackey (Chief Executive Officer)*
SY Moodley (Chief Financial Officer)* (appointed 1 March 2022)
RJ Biesman-Simons (retired 6 June 2022)
N Ford-Hoon(Fok)
EM Hendricks
GJ Heron
SS Mafoyane
* Executive
Date: 15-09-2022 05:15:00
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