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Condensed unaudited consolidated financial results for the six months ended 30 June 2020
SA Corporate Real Estate
(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
("SA Corporate" or the "Company" or the "Group")
Condensed Unaudited Consolidated Financial Results for the six months ended 30 June 2020
Introduction
SA Corporate Real Estate Limited is a JSE-listed Real Estate Investment Trust ("REIT") which
owns a diversified portfolio of quality industrial, retail, commercial and residential buildings
located primarily in the major metropolitan areas of South Africa with a secondary node in Zambia.
The property portfolio consists of 192 properties, with 1 629 105 m2 of lettable area, valued at
R16.6 billion, and a 50% joint venture in three Zambian properties valued at R1.1 billion.
Overview
- Interim distributable income of R311.1 million (June 2019: R515.8 million)
- Total net property income of R542.4 million (June 2019: R700.6 million)
- Total like-for-like net property income declined by 20.2% to R449.3 million
(June 2019: R563.0 million)
- Traditional portfolio vacancies of 5.0% of GLA (December 2019: 4.2%)
- Contracted and executed disposals of R848.1 million (Transferred: R144.3 million; Contracted
awaiting transfer: R703.8 million)
- Loan to value of 38.3%* (December 2019: 36.6%)
- Weighted average cost of funding of 5.65% (December 2019: 8.15%) exclusive of swaps and
7.34% (December 2019: 8.47%) inclusive
* Net debt LTV excluding derivatives, which if included would be 40.7% (2019: 37.0%)
Salient features
The unaudited condensed consolidated financial results for the six months ended 30 June 2020,
as compared to the six months ended 30 June 2019, are set out below:
Revenue of R1 045.4 million (2019: R1 134.9 million)
Operating profit of R537.3 million (2019: R677.5 million)
Headline (loss)/earnings per share of (8.25) cents (2019: 17.96 cents)
(Loss)/earnings per share of (43.79) cents* (2019: 13.85 cents)
Net asset value per share of 424 cents (2019: 501 cents)
In the interest of capital preservation, no interim distribution is to be made for H1 2020
(2019: 20.38cps)
* Decline primarily due to movement in fair value recognised on investment property and swap
derivatives.
Risk mitigation during COVID-19 environment
The COVID-19 pandemic has resulted in challenging trading conditions in the real estate sector
necessitating particular focus on rental collections. SA Corporate had to mitigate the impact of
tenants in distress, which was done through divesting from industrial properties with tenants in
distress and granting rental relief to residential and non-essential retail and commercial tenants
in the form of deferment, deposit utilisation or providing discounts to qualifying tenants. The
deferred payment of the second tranche of the H2 2019 distribution will be paid on 12 October
2020. The Group has not declared a H1 2020 distribution.
Payment of second tranche H2 2019 distribution
Further to the announcement released on SENS on 20 April 2020 regarding the payment of the
second tranche in respect of the income distribution period 1 July 2019 to 31 December 2019,
notice is hereby given of the payment of the second tranche of distribution number 10 in respect
of the income distribution period 1 July to 31 December 2019. The payment amounts to
9.53939cps. The source of the payment comprises net income from property rentals. Please refer
to the statement of comprehensive income on the SA Corporate website for further details.
2 514 732 095 SA Corporate shares are in issue at the date of this distribution declaration and
SA Corporate's income tax reference number is 9179743191.
Last date to trade cum distribution Tuesday, 6 October 2020
Shares will trade ex distribution Wednesday, 7 October 2020
Record date to participate in the distribution Friday, 9 October 2020
Payment of distribution Monday, 12 October 2020
Share certificates may not be dematerialised or re-materialised between Wednesday, 7 October
and Friday, 9 October 2020, both days inclusive.
Tax implications
As SA Corporate has 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 SA Corporate 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 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.
SA Corporate shareholders are advised to contact the CSDP, broker or transfer secretaries, as the
case may be, to arrange for the abovementioned 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. It should be noted that until
31 December 2013 distributions received by non-residents from a REIT were not subject to
dividend withholding tax. From 22 February 2017, any distribution received by a non-resident from
a REIT is 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 7.63151 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 abovementioned 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/2020/jse/isse/SACE/ie2020.pdf and on SA Corporate's
website. 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.
For a more comprehensive analysis of SA Corporate's results and outlook, please refer to
www.sacorporatefund.co.za.
Cape Town
15 September 2020
Sponsor: Nedbank Corporate and Investment Banking
DIRECTORATE AND STATUTORY INFORMATION
Registered office
South Wing, First Floor
Block A
The Forum
North Bank Lane
Century City
7441
Tel 021 529 8410
Registered auditors
PricewaterhouseCoopers
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)*
AM Basson (Chief Financial Officer)*
RJ Biesman-Simons
N Ford-Hoon (Fok)
EM Hendricks
GJ Heron
A van Heerden
* Executive
Date: 15-09-2020 05:40:00
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