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ACP - Acucap Properties Limited - Summarised audited results for the year
ended 31 March 2012
Acucap Properties Limited
(Reg No. 2001/021725/06)
(Incorporated on 12 September 2001)
"Acucap" or "the company"
Share Code: ACP
ISIN: ZAE000037651
SUMMARISED AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2012
Summarised Statements of
Financial Position
at 31 March 2012
2012 2011
R`000 R`000
Assets
Property assets 7 384 501 6 926 761
Investment properties 6 944 457 6 351 984
Non-current receivable 79 551 91 242
Current receivable 27 497 30 259
Investment properties and 7 051 505 6 473 485
related receivables
Investment properties held for - 147 250
sale and related receivables
Investment properties under 267 639 234 023
development
Owner-occupied property 9 395 9 870
Property development inventory 55 962 62 133
Other non-current assets 1 713 779 1 534 948
Loans in respect of unit 321 903 331 383
purchase scheme
Equipment 1 387 1 385
Intangible assets and goodwill 282 493 308 052
Interest in subsidiaries and 5 099 52
jointly controlled entities
Listed investments 1 044 430 834 276
Deferred tax assets 58 467 59 800
Other current assets 239 218 221 043
Trade and other receivables 230 088 214 629
Tax receivable 731 437
Cash and cash equivalents 8 399 5 977
Total assets 9 337 498 8 682 752
Equity and liabilities
Shareholders` interest 3 777 372 3 313 077
Share capital and share premium 1 999 591 1 832 561
Non-distributable reserve 2 069 809 1 699 847
Accumulated loss (292 028) (219 331)
Non-current liabilities 4 823 009 4 500 737
Debentures 1 688 830 1 630 633
Financial liabilities 2 461 176 2 423 093
Financial instruments 83 176 90 199
BEE instrument 137 774 84 042
Deferred tax liabilities 452 053 272 770
Current liabilities 737 117 868 938
Trade and other payables 134 393 127 658
Financial liabilities 353 677 514 591
Tax payable - -
Debenture interest payable 249 047 226 689
Total equity and liabilities 9 337 498 8 682 752
Summarised Statements of
Comprehensive Income
for the year ended 31 March 2012
2012 2011
R`000 R`000
Revenue 640 084 624 298
- Contractual 654 537 636 827
- Straight lining (14 453) (12 529)
Net operating expenses (47 817) (64 616)
Loss on disposal of investment (1 468) (205)
properties
Loss on sale of jointly - (948)
controlled entity
Amortisation of intangible (25 559) (25 151)
assets
Profit before fair value 565 240 533 378
adjustments, interest and
taxation
Fair value adjustment to 435 845 524 940
investment properties
Fair value adjustment to BEE (53 733) (7 495)
instrument
Fair value adjustment to (19 188) 3 927
government bonds
Profit before interest and 928 164 1 054 750
taxation
Interest income 114 400 134 001
Interest expense
- debentures (486 088) (443 397)
- other (234 270) (252 008)
Share of profit of equity 270 -
accounted investee (net of
income tax)
Profit before taxation 322 476 493 346
Taxation (146 133) (65 765)
Profit for the year 176 343 427 581
Other comprehensive (expense)/
income
Net change in fair value of 174 507 (51 826)
listed investments, net of
taxation
Net change in fair value of cash (53 585) (714)
flow hedge, net of taxation
Other comprehensive (expense)/ 120 922 (52 540)
income for the year, net of
taxation
Total comprehensive income for 297 265 375 041
the year
Cents Cents
Basic and diluted earnings per 107.84 272.64
share
Interest distribution per linked
unit
- interim 145.00 136.75
- final 147.32 138.88
Distribution per linked unit 292.32 275.63
Summarised Statement of Cash
Flows
for the year ended 31 March 2012
2012 2011
R`000 R`000
Cash flows from operating
activities
Cash generated from operations 599 398 567 686
Changes in property purchases 6 171 12 835
Income tax paid (3 426) (28 850)
Interest received 114 400 134 001
Interest paid (698 000) (664 233)
Net cash inflow from operating 18 543 21 439
activities
Net cash outflow from investing (40 688) (884 209)
activities
Cash flows from financing
activities
Proceeds from the issue of 167 030 296 628
shares
Proceeds from the issue of 58 197 134 603
debentures
Settlement of financial (58 641) (15 378)
instruments
Financial liabilities raised 481 735 730 984
Financial liabilities repaid (623 754) (316 002)
Net cash inflow from financing 24 567 830 835
activities
Net cash inflow / (outflow) for 2 422 (31 935)
the year
Cash and cash equivalents at 5 977 37 912
beginning of year
Cash and cash equivalents at end 8 399 5 977
of year
Summarised Statement of
Changes in Equity
for the year ended 31
March 2012
Share Share Non-
capital premium distributable
reserve
R`000 R`000 R`000
BALANCE AT 31 MARCH 2010 150 1 535 783 1 307 786
Total comprehensive income/
(expense) for the year
Profit for the year - - -
Other comprehensive expense
for the year
Net change in fair value of - - (51 826)
listed investments
Net change in fair value of - - (714)
cash flow hedge recognised
directly in other
comprehensive income
Total comprehensive income/ - - (52 540)
(expense) for the year
Transactions with owners,
recognised directly in
equity
Issue of 8 717 627 shares in 9 181 913 -
July 2010
Proceeds 9 182 028 -
Share issue costs - (115) -
Issue of 2 471 153 shares in 2 59 613 -
December 2010
Proceeds 2 59 676 -
Share issue costs - (63) -
Issue of 1 685 000 shares in 1 40 601 -
January 2011
Proceeds 1 40 664 -
Share issue costs - (63) -
Issue of 600 000 shares in 1 14 488 -
January 2011
Proceeds 1 14 492 -
Share issue costs - (4) -
Transfer to non- - - 444 601
distributable reserve
Total transactions with 13 296 615 444 601
owners
BALANCE AT 31 MARCH 2011 163 1 832 398 1 699 847
Total comprehensive income/
(expense) for the year
Profit for the year - - -
Other comprehensive income/
(expense) for the year
Net change in fair value of - - 174 507
listed investments
Net change in fair value of - - (53 585)
cash flow hedge recognised
directly in other
comprehensive income
Total comprehensive income - - 120 922
for the year
Transactions with owners,
recognised directly in
equity
Issue of 250 000 shares in - 5 221 -
April 2011
Proceeds - 5 254 -
Share issue costs - (33) -
Issue of 5 575 515 shares in 6 161 803 -
March 2012
Proceeds 6 161 907 -
Share issue costs - (104) -
Transfer to non- - - 249 040
distributable reserve
Total transactions with 6 167 024 249 040
owners
BALANCE AT 31 MARCH 2012 169 1 999 422 2 069 809
Accumulated Total
loss
R`000 R`000
BALANCE AT 31 MARCH 2010 (202 311) 2 641 408
Total comprehensive
income/ (expense) for the
year
Profit for the year 427 581 427 581
Other comprehensive
expense for the year
Net change in fair value - (51 826)
of listed investments
Net change in fair value - (714)
of cash flow hedge
recognised directly in
other comprehensive
income
Total comprehensive 427 581 375 041
income/(expense) for the
year
Transactions with owners,
recognised directly in
equity
Issue of 8 717 627 shares - 181 922
in July 2010
Proceeds - 182 037
Share issue costs - (115)
Issue of 2 471 153 shares - 59 615
in December 2010
Proceeds - 59 678
Share issue costs - (63)
Issue of 1 685 000 shares - 40 602
in January 2011
Proceeds - 40 665
Share issue costs - (63)
Issue of 600 000 shares - 14 489
in January 2011
Proceeds - 14 493
Share issue costs - (4)
Transfer to non- (444 601) -
distributable reserve
Total transactions with (444 601) 296 628
owners
BALANCE AT 31 MARCH 2011 (219 331) 3 313 077
Total comprehensive
income/ (expense) for the
year
Profit for the year 176 343 176 343
Other comprehensive
income/ (expense) for the
year
Net change in fair value - 174 507
of listed investments
Net change in fair value - (53 585)
of cash flow hedge
recognised directly in
other comprehensive
income
Total comprehensive 176 343 297 265
income for the year
Transactions with owners,
recognised directly in
equity
Issue of 250 000 shares - 5 221
in April 2011
Proceeds - 5 254
Share issue costs - (33)
Issue of 5 575 515 shares - 161 809
in March 2012
Proceeds - 161 913
Share issue costs - ( 104)
Transfer to non- (249 040) -
distributable reserve
Total transactions with (249 040) 167 030
owners
BALANCE AT 31 MARCH 2012 (292 028) 3 777 372
2012 2011
Gross Net of Gross Net of
tax tax
Headline R`000 R`000 R`000 R`000
(loss)/earnings
The calculation
of the headline
earnings per
share is based
on a weighted
average of 163
525 174 (2011:
156 829 793 )
shares in issue
during the year
and the headline
earnings is
calculated as
follows:
Profit for the 176 343 427 581
year
Fair value (435 845) (355 301) (524 940) (453 481)
adjustment of
investment
properties
Loss on disposal 1 468 1 197 205 176
of investment
properties
Headline loss - (177 761) (25 724)
shares
Interest paid to 486 088 443 397
debenture
holders
Headline 308 327 417 673
earnings -
linked units
Cents Cents
Headline loss (108.71) * ( 16.40)
per share
Headline 188.55 * 266.32
earnings per
linked unit
* Included in Headline earnings is the effect of the change in the
CGT inclusion rate. Had the effect not been included, a Headline
loss per share of 61.97 cents and Headline earnings per linked unit
of 235.28 cents would have been reported.
BASIS OF PREPARATION AND AUDIT OPINION
The summarised financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) and presented in
accordance with the minimum content, including disclosures, prescribed by IAS
34 applied to year end reporting and AC500 series issued by the Accounting
Practices Board and the requirements of the South African Companies Act of
2008.
The summarised financial statements are prepared on the historical cost
basis, except for investment properties, investment properties held for sale,
derivative financial instruments, financial assets and available-for-sale
financial assets which are measured at fair value.
The summarised financial statements are prepared on the going concern basis
and Acucap`s accounting policies have been applied consistently to all
periods presented.
KPMG Inc. has audited the financial information set out above. Their
unmodified audit report is available for inspection at the company`s
registered office. The information contained in the commentary below does not
form part of the audit opinion.
COMMENTARY
1. REVIEW OF RESULTS AND OPERATIONS
Acucap`s board is pleased to report a distribution of 147.32 cents per unit
(cpu) for the six months ended 31 March 2012. This represents growth of 6.1%
over the same six month period last year. Together with the interim
distribution of 145 cpu, this gives unitholders an annual distribution of
292.32 cpu, a growth rate of 6.05% over the previous financial year.
Acucap was first listed in March 2002, and so these annual results are the
tenth reported by the company. Over the ten years, distributions have grown
at a compound average annual rate of 7.6% per annum compared to inflation at
an annual rate of 4.6% p.a. over the same period. Thus the company has been
able to meet its commitment to inflation equalling growth in cash distributed
to its unit holders. This achievement has been well appreciated by the market
place. The total returns on an investment made in Acucap units with dividends
reinvested have averaged 22% per annum over the ten years.
Acucap`s retail portfolio performed well in the year under review. Reported
sale revenue grew by 7.5% in nominal terms for the year to 31 March 2012
compared to the previous year. Net rental growth from the fund`s retail
assets was marginally lower at 6.9%, with the result that rent to turnover
ratios remain within comfortable ranges across all retail segments, a
positive indicator of the sustainability of rental growth. Leases for
79,720m2 expired during the year, and excluding the effects of the Checkers
Hyper renewal at Festival Mall, renewal rentals were 10.7% higher than
expiring rentals. There was a high tenant retention ratio of 90%. Vacancy
rates remained low across Acucap`s retail portfolio, ending the year at 2.6%
(2011:2.9%).
In Acucap`s high quality office portfolio, vacancies also remained low,
ending the year at 3.3% (2011: 3.5%). Leases totalling 30,360mSquared expired
during the year at an average rental of R133.96/ mSquared, and were renewed
at an average of R121.05/ mSquared. Although this is a negative reversion of
9.6%, it is better than the negative 13.3% forecast in Acucap`s March 2011
results. The achieved net rental rate per square metre of R121.05 is 13.1%
higher than the average rate of R107.01 achieved for office leases entered
into in the 2011 financial year, and seen together with slightly lower
vacancies and better than expected reversions, this indicates an improvement
in the `A` Grade office market.
The last development profits from Helderberg Village were realised in the six
months to 30 September 2011 and there will be no further profits from this
source.
Bad debts written off of R1.27m remained fairly constant compared to the
R1.25m written off in the prior year. The downward trend in the provision for
impairment of tenant receivables continued, decreasing to R2.9m from R3.7m at
31 March 2011 and R4.6m at 31 March 2010.
2. PORTFOLIO INVESTMENT ACTIVITY
Acucap entered into an agreement to acquire a 50% share of the existing
Waterfall convenience shopping centre located on Inanda Road in the western
area of the Durban Metropole. The existing centre will be redeveloped into a
46,000m2 regional shopping mall, being marketed as Waterfall Mall. The
anticipated opening date for the new centre is late 2014. The planning
accommodates two supermarket anchors, Checkers and Spar, with Woolworths,
Edgars, Game and cinemas making up the remainder of the anchor tenant core.
The site is centrally located on Inanda Road linking Hillcrest, Waterfall,
Forest Hills and the upper Kloof areas. The primary market exceeds 20,000
middle to upper income households and is well supported in terms of
demographic research and leasing interest. The mall will be constructed over
a 19 month program at an estimated capital cost of R700m, yielding an
anticipated initial return of 8,3%.
Planning is well advanced for the construction of a Hyper-based retail scheme
in Somerset West to be known as Helderberg Hyper. The development will take
place on a vacant 6,5 hectare site adjacent to Somerset Mall. The site is
centrally located and well positioned to serve the markets of Somerset West,
Strand and Gordons Bay. The development comprises 24,000m2 of GLA and
includes a 9,000m2 Hyper together with supporting line shops and a 7,000m2
self-storage facility over 2 levels. The scheme is supported by 6 parking
bays per 100mSquared of retail GLA, and is structured around an enclosed
retail mall, architecturally referenced to the Wine Estates of the broader
Helderberg and Stellenbosch areas. It is programmed to be complete and
trading by 15 October 2013 with an anticipated first year return of 9% on an
estimated cost of R235m.
3. PORTFOLIO RECAPITALISATION ACTIVITY
Capital expenditure of R130m was incurred in the financial year on the
expansion and refurbishment of retail and office assets. Of this amount,
R116m was spent on the retail portfolio, including the final work on the
Bayside extension (R40m), and refurbishments to Westville (R24m), Key West
(R16m), Randfontein Village (R10m) and East Rand Value Mall (R7m). Looking
ahead, the third and largest phase of the refurbishment of the Key West mall
has commenced with the redevelopment of the food and entertainment zone
around the waterfront, and will include the complete refurbishment of the
internal mall space and the provision of additional structured parking. Due
to the nature of this work, the estimated capital cost of R105m is only
expected to yield 4.5% in the first year, although in the longer term, the
recapitalisation of Key West will improve the growth in retail revenues for
tenants, and rentals received by Acucap.
The Selborne office building in Fourways was disposed of during the year for
R40m compared with its March 2011 valuation of R39.5m. This was Acucap`s only
office building in the Fourways node and was also the fund`s smallest
individual office asset. The Rondebosch on Main Shopping Centre has been sold
after year end for R92m, against its March 2011 valuation of R80m. Following
the earlier disposal of the Watermeyer Park shopping centre, Rondebosch was
Acucap`s smallest retail property. These disposals are consistent with the
fund`s strategy of focussing its asset management effort on a smaller number
of large assets to optimise long-term performance and sustainability of
Acucap`s property portfolio.
On the basis of individual assets and asset segments, Acucap`s net income is
attributable as follows:
Contractual % of Net % of % of net
rental total property total income 2011
income income
R`000 R`000
Festival Mall 17.0% 95 772 16.6% 16.2%
107 225
Bayside Centre 11.1% 61 166 10.6% 9.6%
70 245
Key West 10.0% 56 229 9.8% 10.1%
63 171
Gardens Centre 5.9% 30 896 5.4% 5.7%
37 018
Other retail 25.9% 150 796 26.2% 26.4%
163 112
440 771 69.9% 394 859 68.6% 68.0%
Total Retail
Offices 27.6% 167 480 29.1% 28.3%
173 829
Industrial 2.1% 2.2% 3.7%
13 515 12 795
Storage 0.3% 371 0.1% -
2 043
100.0% 575 505 100.0% 100.0%
630 158
4. SIMPLIFIED FINANCIAL INFORMATION
Simplified financial information is presented to eliminate the effects of
IFRS and accounting adjustments that do not form part of Acucap`s
distribution.
Simplified distribution income statement for the year ended 31 March
2012
year to 31 year to 31 March
March
2012 2011
R`000 R`000
Revenue 630 158 608 738
Net operating (54 653) (54 435)
expenses
Net property income 575 505 554 303
Income from listed 71 097 61 046
investments
Net income from 39 240 28 587
investment in Sycom
Property Fund
Managers
Income from 685 842 643 936
investment
portfolio
Indirect operating (19 771) (19 516)
expenses
Development profits 7 183 8 937
Interest received 11 551 18 636
Interest received 24 936 21 884
on Unit Purchase
Trust
Notional interest 8 583 11 308
received on units
issued
Interest paid (219 830) (218 571)
Debenture holders 498 494 466 614
interest paid - annual
Debenture holders 237 041 228 224
interest paid - interim
Debenture holders 238
interest paid - final 261 453 390
Interim distribution per cents cents
unit 145.00 136.75
Final distribution per
unit 147.32 138.88
Total distribution per
unit 292.32 275.63
Simplified Balance Sheet at 31 March 2012
31-Mar-12 31-Mar-11
R`000 R`000
Assets
Property assets 7 301 373 6 687 419
Listed property investments 1 080 951 868 186
Investment in Sycom Property 466 000 325 000
Fund Managers
Other non-current assets 414 022 422 579
Other current assets 285 108 285 288
Total assets 9 547 454 8 588 472
Equity and liabilities
Shareholder`s interest 6 069 774 5 344 277
Non-current liabilities 2 631 116 2 606 698
Deferred tax 452 053 272 770
Current liabilities 394 511 364 727
Total equity and liabilities 9 547 454 8 588 472
Net Asset Value (Rand)
36.75 32.72
5. PORTFOLIO PERFORMANCE
Retail portfolio
The chart below shows the segmental contribution to sales revenue within
Acucap`s retail portfolio, with the major supermarket chains and national
fashion retailers retaining their dominant position, and the health & beauty
and discount segments showing steady growth.
2011 2012
Segment: % of Sales revenue
Food majors 39.2% 37.5%
Apparel 24.4% 24.9%
Home decor & improvement 3.2% 4.7%
Electronics & music 4.1% 3.9%
Discounters 7.9% 7.6%
Health & beauty 9.9% 10.4%
Food service & entertainment 6.4% 6.3%
Other 4.9% 4.6%
The contribution of each segment to the retail portfolio`s total sales
revenue growth of 7.5% for the year is shown in the chart below, once again
with the food majors, apparel, discounters and health & beauty segments
providing most of the growth
1.3%
Food majors
Apparel 2.0%
Home decor and improvement 0.1%
Electronics and music 0.1%
Discounters 1.7%
Health & beauty 1.6%
Food service and entertainment 0.4%
Other 0.3%
Rent-to-sales revenue ratios are also monitored monthly for each tenant, and
the segmental movements in these ratios are reflected below:
2011 2012
Segment
Food majors 2.6% 2.2%
Apparel 5.7% 6.0%
Home 9.1% 7.1%
Electronics 3.3% 3.6%
Discounters 3.3% 2.7%
Health & beauty 2.4% 2.4%
Food Service 8.5% 8.2%
There were substantial improvements in the rent to sales revenue ratios for
the food majors, home and discount segments, where sales revenue growth was
higher than rental escalations. The apparel and health and beauty segments
showed a slight deterioration as escalations outpaced sales revenue growth,
although the absolute ratios remained comfortably within the norms for these
two segments at 6% and 2.7%. The rent to sales revenue ratio for the
electronics segment declined by 10.5% as turnovers fell by 4% against average
rental escalations of 6.5%, although the electronics segment had two years of
strong turnover growth in 2010 and 2011, and the rent to sales revenue ratio
remains acceptable at 3.6%.
Office portfolio
Leases for 12,836 mSquared are due to expire in the 2013 financial year at an
average rental of R139.71/ mSquared and current expectations are for renewals
to be concluded approximately 2% lower at an average of R137.20/m2, at the
same time maintaining the high retention ratio that has characterised
Acucap`s office portfolio.
Sycom
Distributions received from Acucap`s investment in Sycom Property Fund were
6.4% higher at 166.66 cpu compared to 156.67 cpu in the year to 31 March
2011. There was a marked recovery in Sycom`s office portfolio, with vacancies
declining from 11.7% to 5.1% in the year under review. Acucap looks forward
to further improvements in the year ahead, with vacancies expected to decline
to normalised levels of below 3%.
Sycom`s retail portfolio produced a solid 6.6% growth in sales revenue, with
the segmental contributions to the overall result largely unchanged from the
prior year. Renewal rentals on the 44,511mSquared of leases that expired
during the year were concluded at 3.8% higher than expiring rentals.
Sycom`s gearing is low and the fund has a number of acquisition opportunities
that are expected to contribute to growth in distributions over the long
term.
Helderberg Village
Acucap sold the last units in the year under review. There will be no
development profits from Helderberg in the 2013 financial year, and the
effects of Helderberg will be out of the distribution base by the end of the
2014 financial year.
6. SELF-STORAGE JOINT VENTURE
Acucap has formed a strategic joint venture with Faircape and SA Self Storage
Investments (`SASSI`) to develop a specialised portfolio of self-storage
properties across South Africa.
Self-storage is a mature asset class in the United States, Europe, the UK and
Australia, where the markets are dominated by a relatively small number of
large listed companies. The South African market, by contrast, is still
characterised by fragmented private ownership and low levels of market
penetration, and the purpose of Acucap`s joint venture with Faircape and
SASSI is to lead in the development of the self-storage asset class in South
Africa.
To date, the JV has 12 operational sites with a value of approximately R470m,
with 7 other sites acquired and either under construction or in the plan
approval phase. There are a further 4 properties under offer. Together, these
sites will comprise a portfolio of 23 stores with a value of over R1bn.
Discussions are also in progress with owners of existing self-storage product
in suitable locations, with a view to acquiring these as a first round of
industry consolidation. The JV`s objective is to build the portfolio to a
point where it can be separately listed.
7. BORROWINGS
The company has total borrowings of R2.63 billion. Interest rates are hedged
on 48% of total borrowings, at a weighted average rate of 9.8% and a weighted
average maturity of 4.9 years. Acucap`s average cost of finance at 31 March
2012 was 8.2% (2011: 9%). The gearing ratio at 31 March 2012 was 29.6%, down
from 34.1% at the end of March 2011. At year end, Acucap had unutilised long-
term facilities of R966m. The chart below shows the fund`s borrowings
relative to its investment portfolio over the last 10 years.
Total Borrowings Gearing ratio
investment (Rm)
portfolio
(Rm)
March 2003 49.4%
913 451
March 2004 1 068 39.0%
416
March 2005 1 718 36.8%
633
March 2006 2 364 28.0%
662
March 2007 3 307 18.2%
601
6 300 2 453 38.9%
March 2008
6 002 2 286 38.1%
March 2009
6 658 2 343 35.2%
March 2010
8 077 2 754 34.1%
March 2011
8 900 2 631 29.6%
March 2012
PROPERTY PORTFOLIO VALUATION
The Acucap portfolio was revalued at 31 March 2012 by independent valuers.
The value of the property portfolio increased from R6.5bn at the end of March
2011 to R7.3bn at the end of the current financial year, a 12.3% increase.
Excluding the effects of capital expenditure and disposals from the base, the
portfolio value increased by 6% over the prior year. A complete property
valuation schedule is set out below. In addition to independent values and
capitalisation rates, the schedule also indicates average net rentals per m2
for each property, as well as its occupancy level. In the case of the office
segment, average net rental rates per m2 include parking revenue.
Following the year end revaluation, Acucap`s Net Asset Value (NAV),
calculated excluding the effects of deferred tax, increased to R36.75 from
R32.72 per linked unit at 31 March 2011.
Schedule of investment properties
Independent Cap rate Average Occupancy
valuation at rental per rate at
31/03/2012 31/03/2012 square 31/03/2012
meter at per
31/03/2012 rentable
(including area
parking)
R`000
Retail 5 050 691 97.4%
107.97
Festival Mall, 1 259 000 7.25% 100.0%
Kempton Park 97.31
Bayside Centre, 936 000 8.50% 97.1%
Table View 126.56
Keywest, 818 000 7.75% 92.9%
Krugersdorp 103.80
Gardens Centre, 442 000 8.00% 95.2%
Cape Town 190.91
Howard Centre, 247 000 8.75% 97.1%
Pinelands 118.59
The Village 238 800 8.50% 99.7%
Square, 102.83
Randfontein
Westville Mall, 225 000 8.50% 98.8%
Durban 114.74
East Rand Value 191 600 8.75% 93.9%
Mall, Boksburg 110.89
14thAvenue 185 000 8.50% 100.0%
Hyper, 63.87
Roodepoort
50% Hillcrest 150 000 9.00% 98.4%
Corner, Durban 134.33
Sunward Centre, 134 000 8.75% 97.3%
Boksburg 90.91
27.5% of The 126 791 8.50% 97.3%
Bridge, Port 90.24
Elizabeth
Rondebosch-on- 92 000 9.00% 97.7%
Main, Cape Town 103.82
Boulevard 5 500 9.50% 100.0%
Piazzas, Fricker 150.58
Road, Illovo
Offices 1 778 556 96.7%
131.51
Tygerberg Office 317 156 8.50% 96.8%
Park 142.14
Golf Park, 221 000 9.25% 91.5%
Mowbray 116.75
Microsoft, 167 000 8.50% 90.3%
Bryanston 130.45
82 Grayston 120 000 9.00% 100.0%
Drive, Sandown 154.43
Tiger Brands, 116 700 8.50% 100.0%
Bryanston 118.93
28 Fricker Road, 110 000 9.00% 100.0%
Illovo 162.96
Bogare, Menlyn, 102 000 8.75% 100.0%
Pretoria 121.57
Nautica, Granger 96 200 8.50% 100.0%
Bay, Cape Town 148.45
Pharos House, 84 000 8.75% 85.5%
Westville Mall, 113.60
Durban
4 Fricker Road, 81 500 8.75% 100.0%
Illovo 143.58
The Village, 75 000 9.25% 100.0%
Faerie Glen, 103.51
Pretoria
SA Weather 65 000 9.50% 100.0%
Services, 143.07
Pretoria
36 Fricker Road, 62 000 9.00% 100.0%
Illovo 134.23
16 Fricker Road, 60 000 8.50% 100.0%
Illovo 116.88
Albion Springs, 53 000 9.00% 100.0%
Rondebosch 149.16
Bremerton Office 48 000 9.50% 100.0%
Park, Port 106.28
Elizabeth
Industrial 127 850 97.3%
62.07
20% of N1 61 100 9.00% 100.0%
Business Park, 63.56
Midrand
30% of Tellumat, 46 500 10.25% 93.7%
Retreat, Cape 61.10
Town
25% of Montague 20 250 9.00% 100.0%
Business Park, 58.60
Cape Town
Retail, Office 6 957 097 112.10 97.2%
and Industrial
Storage 76 637
Investment 267 639
properties under
development
Acucap Property 7 301 373
Portfolio
9. LEASE EXPIRIES OVER THE LAST 12 MONTHS
The table below shows a summary of leasing activity in the Acucap portfolio
over the last financial year.
Expiries Average Average New Average Average
and through escalation leases through escalation
terminations rent at rate at and rent rate for
expiry expiry renewals for new new leases
leases
Major 58 255 121.46 8.5% 58 635 7.5%
retail 112.78
Other 21 465 109.28 7.8% 22 150 8.2%
retail 122.80
Offices 30 360 133.96 8.2% 30 288 8.6%
121.05
Industri 5 099 58.30 8.0% 5 338 6.6%
al 56.77
Excluding the effects of the renewal of the Checkers Hypermarket lease at
Festival Mall, leases at major retail centres were concluded at a weighted
average net rental of R124.46, 10% higher than the corresponding average
expiry rental of R113.09.
The pattern of expiries and renewals can be seen in the context of Acucap`s
overall portfolio in the table below, which reconciles the opening and
closing gross lettable area, taking into consideration expiries, renewals,
new leases, extensions to GLA, and acquisitions and disposals.
Revised Expiries New Additio
opening and leases and ns Properties Closing
GLA terminations renewals sold GLA
(excluding
storage)
Total 442 562 (105 624) 105 441 3 615 (3 394) 442 600
- let 428 533 (115 178) 116 411 3 967 (3 394) 430 339
- vacant 14 029 9 554 (10 970) (352) - 12 261
10. LEASE EXPIRIES OVER THE NEXT 12 MONTHS
Over the next financial year, leases for 61 778m2 will expire, representing
14 % of the portfolio GLA. Details of the expiry rentals are shown below,
together with estimated renewal rentals. For offices, there is a forecast
negative reversion of 2%, and for retail, a positive reversion of 6.1% is
expected.
Area Net rental / Net expected
terminating m2 at expiry rental/m2 on
to 31-3- date renewal
2013 m2
Offices 12 836 139.71 137.20
Retail 48 942 152.75 162.09
Over the longer-term, the fund continues to show a good, long-dated lease
expiry profile. The principal renewals in the retail portfolio over the next
2 years are cyclical renewals at Festival Mall, Key West and the Gardens
Centre. The table below shows the pattern of expiries for all leases in the
Acucap portfolio, measured by rental income.
Total Vacancy by Leases Leases
contractual rental expiring expiring
rental income year to year to
income Mar-2013 Mar-2014
Retail 69.3% 2.3% 15.0% 10.7%
Offices 28.7% 0.7% 3.6% 8.0%
Industrial 2.0% 0.0% 0.2% 0.2%
Total 100.0% 3.0% 18.8% 18.9%
Leases Leases Leases Leases
expiring expiring expiring expiring
year to year to Mar- year to year to Mar-
Mar-2015 2016 Mar-2017 2018 and
beyond
Retail 15.4% 9.3% 9.0% 7.7%
Offices 7.3% 3.0% 0.7% 5.4%
Industrial 0.3% 0.2% 0.2% 0.8%
Total 23.0% 12.5% 9.9% 13.9%
MAJOR TENANTS BY AREA AND INCOME
Acucap`s twenty largest tenants account for 49.5% of its rental income, with
retail tenants contributing 42.1% and office tenants 7.4%, in line with the
fund`s high retail weighting in its property portfolio. The tenants listed
below indicate the high quality of Acucap`s rental cash flows.
Tenant Rental Area
Shoprite 5.6% 10.9%
Pick `n Pay 4.3% 6.5%
Edcon 4.3% 4.7%
SAG and parastatals 3.5% 2.8%
Foschini Group 3.1% 2.1%
Pep 3.1% 2.3%
Mr Price 2.9% 2.8%
Nedbank 2.5% 1.9%
Absa 2.4% 1.5%
Microsoft 2.2% 1.9%
Massmart 2.1% 3.4%
Standard Bank 1.8% 1.2%
Woolworhs 1.8% 3.8%
Truworths 1.7% 1.5%
Clicks 1.7% 1.7%
Tiger Brands 1.7% 1.5%
First National Bank 1.4% 0.9%
Virgin Active 1.3% 1.8%
Famous Brands franchisees 1.3% 0.8%
Ster Kinekor 0.9% 2.4%
12. VACANCIES
Total vacancies by income have reduced from 4.1% at the end of March 2011 to
3% a year later as a result of the completion of redevelopment activities at
the Bayside and Howard Centres.
The table below shows the vacancy attributable to each segment of the Acucap
portfolio by GLA :
Vacancy profile by sector by GLA
% of Total GLA
Retail vacancy 1.9%
Office vacancy 0.8%
Industrial vacancy 0.1%
GLA let 97.2%
13. COST TO INCOME
The benefits of scale, portfolio composition and in-house property
administration continue to reflect in Acucap`s low net cost-to-income ratio
2012 2011 2010 2009 2008
Net cost to income 11.1% 11.6% 11.5% 11.1% 14.2%
Increases in the cost of electricity remain a concern, but total consumption
of electricity in the Acucap portfolio, measured in kilowatt hours, decreased
by 1.5% compared to the same period last year, and further reductions are
expected as the fund continues to implement energy efficient technologies at
its retail and office buildings.
14. UNIT HOLDER SUMMARY
A summary of Acucap`s unit holder profile is set out below. Annual trade in
Acucap`s linked units was 21% of the total number of units in issue,
indicating a sound level of liquidity, particularly considering the long-term
nature of many of Acucap`s major unit holders.
Mar-12 Mar-11
Government Employees 11.7% 13.3%
Pension Fund
Investec Asset Management 9.7% 9.3%
Directors and employees 8.6% 9.2%
Stanlib 7.7% 9.1%
Old Mutual Asset 6.8% 6.6%
Management
Nedbank 5.9% 6.1%
Thesele Group (Pty) 4.7% 4.9%
Limited
Coronation 3.3% 7.9%
58.4% 66.4%
Other shareholders 41.6% 33.6%
100.0% 100.0%
Number of unitholders 3282
4194
Weighted average units 171 939 337 165 250 787
Units traded 36 118 41 989
038 078
Annualised liquidity 21.0% 25.4%
15. PROSPECTS
The Acucap property portfolio remains well-positioned to continue delivering
real growth in distributions, although South Africa`s economic recovery
remains fragile. Under these circumstances, and with the last development
profits still in the 2012 income base, the board expects distributions for
2013 to increase by 4% to 6%. Once the effects of development profits are out
of Acucap`s income base, growth in distributions can be expected to move into
the 6% to 8% range, in line with the potential of Acucap`s high quality
property portfolio.
The above information has not been reviewed or reported on by Acucap`s
auditors.
14. PAYMENT OF DEBENTURE INTEREST
Notice is hereby given that a final interest distribution of 147.32 cents per
linked unit has been approved in respect of the six month period ended 31
March 2012. The last date to trade the linked units cum distribution is
Friday 22 June 2012 and the record date will be Friday 29 June 2012. The
linked units will start trading ex-distribution from Monday 25 June 2012.
Distributions will be made to unit holders on Monday 2 July 2012.
Linked unit certificates may not be dematerialised or rematerialised between
Monday 25 June 2012 and Friday 29 June 2012 both days inclusive.
On behalf of the Board
BS KANTOR PA THEODOSIOU
Chairman Managing Director
7 June 2012
Registered Office
Suite A11 Westlake Square
Westlake Drive
Westlake
CAPE TOWN
Transfer secretaries:
Computershare Investor Services (Proprietary) Limited
70 Marshall Street
JOHANNESBURG
http://www.acucap.co.za
info@acucap.co.za
Share Code: ACP
ISIN : ZAE 000037651
Directors: Prof BS Kantor (Chairman), PA Theodosiou*# (Managing Director), FM
Berkeley, RC Frolich, N Mandindi, C B Marlow *, M S Moloko, JH Rens*, B
Stevens, NDC Whale
Company secretary: H H-O Steyn
* Executive # British
Date: 07/06/2012 07:06:01 Supplied by www.sharenet.co.za
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