Wrap Text
Summarised Consolidated Financial Statements For The Year Ended 30 June 2013
Vunani Property Investment Fund Limited
(Granted REIT status by the JSE)
(Registration number: 2005/019302/06)
ISIN: ZAE000157459
JSE code: VPF
(“VPIF” or “the Fund” or “the Company” or “the Group”)
SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 (Prepared
by M de Lange B.Com (Law) B.Com (Hon)(Acc), Financial director)
INTRODUCTION
The past financial year presented VPIF with a familiar set of challenges. Despite this, the Fund
recorded growth in the market value of its units of 21.8% to 1 005 cents per linked unit and
distribution growth of 19.7% delivering 77.25 cents per linked unit. The total compounded growth
delivered to its unitholders for the year was an excellent 31.2% (24.0% for the SA Property Listed
Sector). Notably, this was achieved in the toughest trading conditions the Fund has experienced in
its 8 year history. As anticipated at the start of the year, the streetscape remained challenging,
requiring us to be innovative so as to maintain solid growth in rental income, contain costs and retain
our tenants. That said, the portfolio emerged at year end with an improvement in its Key Performance
Indicators and the directors are confident that 2014 will yield above-market returns for unitholders.
The single area in which we did not meet our targets was that of acquisitions. In December 2012, we
set ourselves a goal of growing assets under management by R1 billion. However, the low interest
rates combined with some new listings fuelled a feeding frenzy, inflating vendor demands. This
resulted in many assets being priced beyond the reach of rational investors. VPIF maintained its
discipline and consequently our new acquisitions totaled a slightly embarrassing R84.6 million.
Although we would have preferred far stronger growth, we are reluctant to buy overpriced assets in
what has proved to be an over-excited market. We believe that the recent market correction will
filter down to vendors, thus creating value plays for the Fund.
Notwithstanding the above, the Fund obtained linked unitholders’ approval subsequent to year-end
to raise up to R455 million through a rights offer; the proceeds of which will be used to fund the
acquisition of quality A-grade properties in Greenstone Hill Office Park and to pay down R179.1
million of existing debt. The capital raise will provide VPIF with the ability to acquire assets of R750
million without recourse to unitholders. This same strategy was used on listing and enables the Fund
to trade efficiently, enhancing both the portfolio quality and distribution. Management have a solid
pipeline of acquisitions under negotiation and have put in place adequate resources internally to
effect the deals. Consequently, we anticipate accelerated (but controlled) acquisition activity in
2014.
During the year, VPIF converted to a Real Estate Investment Trust (REIT), effective from 1 July 2013.
The conversion to REIT status provides capital gains tax benefits and will likely attract foreign interest
to the sector as it provides a familiar benchmark for international investors. Furthermore, Vunani
Limited disposed of its 15.5% stake in VPIF to facilitate its other commitments. Key management
however retained their unitholding and intend to follow their rights in the capital raise.
Overall, 2013 was an excellent year for the Fund. We have developed a strong platform from which
to grow and the results to date are pleasing.
OPERATING ENVIRONMENT
A moribund global economy and continued uncertainty over the Eurozone formed the backdrop to
the operating environment over the last year. Albeit slow, signs of recovery in both Europe and the
United States indicate that the next year should see some uplift in South Africa’s main trading
partners. The United States’ Federal Reserve Bank’s indication that it will reduce quantitative easing
gave our long bond markets (and consequently the property sector) an overdue correction. The
disparity between our long bond yields and those of the property listed sector remains a concern with
another correction possible in the coming months. The sector now offers investors a more stable
platform going forward, with predictable income.
On a portfolio level, the market remains tough despite the continuing low interest rate environment
as the South African economy continues to stumble along with little direction. The South African
Reserve Bank’s June quarterly bulletin indicates a narrowing in the current account deficit to 5.8%
of gross domestic product (GDP) from 6.5% in the first quarter. Investor confidence has been shaken
by domestic disruption, labour unrest and rand volatility. With the GDP growth forecast falling and a
weaker economic outlook, consumer spending has slowed, making tenants cautious when assessing
their requirements.
The office sector has not been immune to the dull economic forecasts, however we are comfortable
that the office sector is at the bottom of the cycle and are pleased to report that VPIF has
outperformed all property sectors by some margin despite these tough conditions.
We have experienced the usual upward pressures on administration and operating costs, such as
municipal rates and utilities (electricity, water and waste). These costs have successfully been
managed and controlled through a combination of greening initiatives and prudent management. We
are pleased to report that solid advances are being made with regard to our greening initiatives,
following VPIF receiving the 2012 Energy Efficiency Forum Award for its refurbishment of 14 Loop
Street, a 1904 heritage building.
Our vacancy rate is a stable 5.6% which compares well with the industry average of 10.7%. The sector
vacancies in 2014 may even be exacerbated in those nodes where speculative development will result
in landlords competing for the same pool of tenants. VPIF unitholders will be pleased to know that it
has very little exposure to this cannibalisation.
ACQUISITIONS
Our main considerations when acquiring assets will always be a keen focus on the property
fundamentals and our downstream ability to manage the assets competently. Management is
cognisant of the real cost of poor acquisitions, much of which is only evidenced some time later.
Similarly, it is the responsibility of management to improve the quality of the portfolio and this needs
to be balanced with the appetite of investors for above market distributions.
While there has been a fair amount of stock on offer, it has been challenging to acquire solid assets
at sensible yields. VPIF will not acquire assets at the expense of quality or yield and where value
cannot be seen.
A key component to any growth strategy is the ability to take on and manage the new assets. We are
pleased to report the management team has been increased and this will enable us to deliver a more
robust acquisition performance in 2014.
It is the responsibility of management to improve the quality of the portfolio and this must be
balanced with the appetite of investors for above-market distributions.
To date we appear to have met this responsibility, albeit at a slower pace than we would have liked.
Two acquisitions were made in the reporting period:
• 5 251 m2 GLA Brickfield Property in Woodstock, acquired for a purchase consideration of R20
million and an acquisition yield of 10.0%. The property is located in the rapidly developing
Brickfields node and is ripe for redevelopment;
• Business Centre property located prominently in Rivonia Boulevard, Sandton for a purchase
consideration of R64.5 million with an acquisition yield of 9.6%. The 4 886 m2 GLA property
is single tenanted under a 10 year triple net lease.
REFURBISHMENTS AND EXTENSIONS
As part of our tenant retention strategy, VPIF has carved a niche as a specialist in refurbishments,
particularity green refurbishments. Apart from a higher property valuation, the refurbishment of
these buildings has resulted in a more stable tenant profile and increasing distributions.
Since listing, we have undertaken 6 refurbishments of varying sizes. In the last reporting period we
calculated that for every rand spent we achieve at least three rand in value uplift. Far more important
than an enhanced valuation, is the rental growth and improved quality of the offering.
The Fund completed a number of modest, but important upgrades in the reporting period and is
pleased with the results.
Investment Place is currently undergoing a refurbishment project where all the foyers and washrooms
are being overhauled. Tenanting commences in August 2013.
On the back of the successful 14 Loop Street refurbishment, we have made further encouraging and
significant strides in developing other properties into environmentally friendly buildings. This will
further enhance VPIF’s portfolio and reputation as a greening refurbishment specialist. We are now
looking to leverage this expertise by implementing the same strategy on a much larger scale at the
Foretrust Building, located in the fast developing node of the Cape Town Foreshore. On the basis of
significant savings (as much as R15 per m2 at 14 Loop Street) we strongly believe that refurbishments
according to green principles will sustain the growth of the Fund over the long term. As such, each
building in our portfolio is currently being assessed by way of a rating model and we have appointed
a consulting team of green experts to further develop our offering.
VACANCIES
VPIFs vacancies remained low at 5.6% (4.5% if the planned refurbishment of Investment Place is
excluded), which is still significantly lower than the sector vacancies for A and B grade offices of
10.7%. Hands-on management and strong relationships with tenants have ensured a low vacancy rate.
Importantly, we have not had to give material discounts or incentives to tenants to keep our buildings
full. Given the sluggish economy, tenant retention will remain a key factor going forward.
LEASE EXPIRIES
VPIF started the year with 23.3% of leases due to expire. It achieved a very successful 73% retention
rate, with the 3 158m2 vacancy at Investment Place being the dominant non-renewal. Fortunately,
we only have two material leases expiring in 2014 amounting to 7% of our lettable area, 5.5% of which
is under a lease renewal offer. Thus, the Fund has very little exposure to expiring leases in 2014. We
do not see any notable risks and are confident that there will be few if any reversions as rentals are
very much in line with, if not below, the market average. The overall weighted average lease expiry
is 4.75 years with the average lease escalations at approximately 7.7%.
FINANCIALS
Overall, VPIF produced a very pleasing set of results in the financial year ended 30 June 2013,
delivering distribution growth of 19.7% and capital growth of 21.8%; the total compound growth for
the period being 31.2%.
The Fund reported a strong performance and exceeded its distribution targets, with the linked unit
price commensurately improving. On 3 December 2012, the Fund released a trading update
announcing that the anticipated interim distribution would be 18% to 24.4% greater than the
comparable interim period. VPIF declared an interim distribution of 38.0 cents per linked unit.
Subsequently, on 31 May 2013, the Fund again released an additional trading statement to indicate
a further 16% to 18% distribution growth on the comparable period. The board of directors declared
a final distribution of 39.25 cents per linked unit, giving total distributions of 77.25 cents per linked
unit for the year. Management believes these factors will continue to have an enduring and
sustainable impact on future distributions.
Investment property income increased by 30.8% from R165.860 million to R216.883 million for the
year to 30 June 2013.
Total property related expenses increased by 29.5% from R57.874 million to R74.948 million mainly
due to a full 12 month reporting period and acquisitions made during the year. Management believes
that life cycle costing and the retention of quality in both its buildings and tenants are more
important considerations and therefore does not focus exclusively on expense ratios.
BORROWINGS
Net borrowings at 30 June 2013 of R489.905 million equates to a gearing ratio of 31.25%, which is
well within the covenants and the directors do not expect that gearing levels will exceed 40%. The
blended average cost of debt is 8.7%, broken down into an average of 9.3% (inclusive of margin) for
fixed debt for a remaining period of 4 years and floating at an average of 7.6% (inclusive of margin).
R179.1 million of the R455 million rights offer will be used to pay down the Fund’s floating debt.
Coupled with this, we renegotiated our rates with Standard Bank which also significantly reduced our
cost of funding in addition to bedding down a facility of R670 million.
In the near future, VPIF plans to enter debt capital markets through a domestic medium term notes
(DMTN) programme to raise further cash to fund acquisitions. DMTN programs are currently more cost
effective than conventional bank funding.
STRATEGY
VPIF will continue to focus on its chosen niche as specialists in the A+, A and B+ grade office sector
where arbitrage opportunities are greatest. With that said, management is open to buying assets in
other classes, be they industrial or retail, provided that there is value and we are confident we can
manage the assets. The Fund will remain office-dominated.
We will continue to focus on growing the assets under management through strategic acquisitions
that fit within the Fund’s investment criteria of yield and quality enhancing assets, while avoiding
trophy assets which remain in high demand and highly priced. The recent re-rating should provide
some acquisition opportunities.
The management team has an eight year proven track record of extracting value from commercial
buildings. Together with the green initiatives gaining traction, the Fund is well-positioned for
continued growth in distributions to unitholders and to ensure the long-term capital appreciation of
our assets.
CORPORATE GOVERNANCE
VPIF is committed to continuously improving corporate governance, in line with the recommendations
by the King Code on Corporate Governance for South Africa 2009 (King III). We were delighted to
announce the recent appointment of Portia Tau-Sekati and Kyansambo Vundla (effective 11 March
2013) as independent non-executive directors. Portia was subsequently appointed to the investment,
social and ethics, remuneration and nomination committees and Kyansambo to the audit and risk
committee.
The board now consists of three executive directors, five independent non-executive directors and
two non-executive directors.
SUBSEQUENT EVENTS
Post the financial year end, VPIF received approval from the JSE to proceed with a rights issue to
raise up to R455 million. The Fund offered a total of 48 503 939 new linked units to unitholders at a
subscription price of 987.33 cents per rights offer unit (which includes the accrued distribution and
antecedent). This is in the ratio of 40.21283 rights offer units for every 100 linked units held on the
record date for the rights offer.
The subscription price of 987.33 cents per rights offer unit comprises a clean price of 938.07 cents
and total pre-paid distributions of 49.26 cents. As a result, the rights offer units will be entitled to
the full final 2013 distribution.
Proceeds of the rights offer will be used to fund the acquisition of quality A-grade properties in
Greenstone Hill Office Park and settle approximately R179.1 million of floating debt, giving us
capacity to acquire buildings using available debt capacity. Post the acquisition, VPIF will own 11 of
the 15 properties in that office park.
OUTLOOK
VPIF continued to outperform the sector and delivered on its promises to all stakeholders. Positive
distribution growth for the upcoming financial year is expected with distributions anticipated to be
between 84.00 to 86.00 cents per linked unit as indicated in the SENS announcement dated 28 June
2013.
As mentioned before, the outlook is tough but we trade well in a tough market.
Statements contained throughout this announcement regarding the prospects of the group have not
been reviewed or reported on by the group’s external auditor.
NOTE OF GRATITUDE
Our sincere thanks go to every VPIF staff member and the property management team who gave of
their very best every day and continue to shine in a dull market. Our performance is a reflection of
this hard work, which is greatly appreciated by the board of directors.
Our appreciation is also extended to our fellow executives on the board. Their commitment, depth
of knowledge and skills are invaluable. Finally, we would not have a fund if it was not for the support
received from all our institutional linked unitholders who have believed in our vision to build a very
stable, sustainable business, and of our tenants who continue to support us.
STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE
GROUP
R’000 2013 2012
ASSETS
Non-current assets 1 586 016 1 441 059
Investment property 1 567 667 1 426 394
Property, plant and equipment 6 734 6 936
Other non-current assets 7 028 7 729
Deferred tax 4 587 -
Current assets 34 882 33 972
Trade and other receivables 11 261 13 893
Income tax receivable 66 37
Cash and cash equivalents 23 555 20 042
Loan to subsidiaries
Loan to group entity
Total assets 1 620 898 1 475 031
EQUITY AND LIABILITIES
Equity 452 524 307 190
Ordinary share capital 301 301
Accumulated loss (46 061) (56 500)
Non-distributable reserves 498 284 363 389
Debentures 587 029 588 918
Linked unitholders’ interest 1 039 553 896 108
Other liabilities
Other non-current liabilities 219 905 203 606
Other financial liabilities 219 905 123 110
Deferred tax - 80 496
Current liabilities 361 440 375 317
Current portion of other financial liabilities 275 796 306 296
Trade and other payables 85 644 69 021
Total liabilities 581 345 578 923
Total equity and liabilities 1 620 898 1 475 031
Units in issue (‘000) 120 618 120 618
Net asset value per linked unit (cents) 861,9 742,9
Net tangible asset value less deferred tax per linked
unit (cents) 858.1 809,7
STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE
GROUP
R’000 2013 2012
Investment property income 216 883 165 860
Straight-line rental adjustment 12 957 5 994
Revenue 229 840 171 854
Property expenses (74 948) (57 874)
Net property income 154 892 113 980
Other income 1 967 926
Other operating expenses (3 169) (15 274)
Asset management fees (8 120) (5 359)
Operating profit 145 570 94 273
Finance income 1 616 2 005
Finance cost amortisation - (45 694)
Finance costs (40 821) (25 085)
Fair value adjustments 45 405 106 835
Profit before debenture interest and income tax 151 770 132 334
Distributions (93 174) (77 813)
Trust distributions – net rental income - (2 324)
Debenture interest (93 174) (75 489)
Profit before amortisation of debenture premium 58 596 54 521
Amortisation of debenture premium 1 889 1 679
Profit before income tax 60 485 56 200
Income tax 84 849 (35 098)
Profit for the year 145 334 21 102
Total comprehensive income for the year 145 334 21 102
Basic and diluted earnings per linked units (cents) 196.17 85.69
Distribution per linked unit (cents) 77.25 64.51
STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE
Non- (Accumulated
Ordinary distributable loss)/Retained
R’000 share capital reserve earnings Total
GROUP
Balance at 30 June 2011 142 277 505 8 282 285 929
Transactions with owners of the
company recognised directly in
equity
Issue of linked units 159 159
Transfer to non-distributable
reserve 85 884 (85 884) -
Total comprehensive income for
the year
Profit for the year 21 102 21 102
Balance at 30 June 2012 301 363 389 (56 500) 307 190
Transactions with owners of the
company recognised directly in
equity
Transfer to non-distributable
reserve 134 895 (134 895) -
Total comprehensive income for
the year
Profit for the year 145 334 145 334
Balance at 30 June 2013 301 498 284 (46 061) 452 524
STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE
GROUP
R’000 2013 2012
Cash flows from operating activities
Cash generated by operations 147 770 89 544
Finance income received 1 616 2 005
Finance costs paid (40 821) (25 085)
Trust distributions – net rental income - (2 324)
Debenture interest paid (86 810) (34 516)
Income tax paid (262) (62)
Net cash inflow from operating activities 21 493 29 562
Cash flow from investing activities
Additions to property, plant and equipment (2 272) (2 507)
Additions to investment property (5 486) (7 141)
Additions to other non-current assets (1 020) (5 566)
Acquisition of businesses (84 583) (479 711)
Net cash outflow from investing activities (93 361) (494 925)
Cash flow from financing activities
Proceeds from issue of linked units - 448 339
Advance of other financial liabilities 118 781 73 747
Repayment of other financial liabilities (43 400) (40 655)
Net cash inflow from financing activities 75 381 481 431
Net increase in cash and cash equivalents 3 513 16 068
Cash and cash equivalents at the beginning of the year 20 042 3 974
Cash and cash equivalents at the end of the year 23 555 20 042
BASIC, DILUTED, HEADLINE EARNINGS AND DISTRIBUTION PER LINKED UNIT
GROUP
30 June 30 June
Cents per linked unit 2013 2012
Basic earnings per linked unit 196.17 85.69
Headline earnings per linked unit 97.44 3.81
Distribution per linked unit 77.25 64.51
BASIC EARNINGS PER LINKED UNIT
The calculation of basic earnings per linked unit was based on the earnings attributable to linked
unitholders of R236.620 million (2012: R97.236 million), and a weighted average number of linked
units in issue of 120,618,080 (2012: 113,474,635).
HEADLINE EARNINGS PER LINKED UNIT
The calculation of headline earnings per linked unit was based on headline earnings attributable to
linked unitholders of R117.533 million (2012: R4.322 million), and a weighted average number of
linked units in issue of 120,618,080 (2012: 113,474,635).
DILUTED BASIC EARNINGS AND DILUTED HEADLINE EARNINGS PER LINKED UNIT
There were no dilutive instruments in issue at year end.
DISTRIBUTION PER LINKED UNIT
The calculation of distribution per unit was based on the distributable earnings attributable to linked
unitholders of R93.174 million (2012: R77.813 million), and an issued number of linked units of
120,618,080 (2012: 120,618,080).
GROUP
30 June 30 June
R’000 2013 2012
EARNINGS:
Profit attributable to equity holders: 145 335 21 102
Adjust for:
Trust distributions – net rental income - 2 324
Debenture interest 93 174 75 489
Amortisation of debenture interest (1 889) (1 679)
Earnings attributable to linked unitholders 236 620 97 236
HEADLINE EARNINGS:
Profit attributable to equity holders: 145 335 21 102
Adjust for:
Trust distributions – net rental income - 2 324
Impairment of goodwill - 1 190
Debenture interest 93 174 75 489
Profit on sale of subsidiaries (1 927) -
Amortisation of debenture interest (1 889) (1 679)
Revaluation of investment property
Gross revaluation (36 320) (115 607)
Deferred taxation (80 840) 21 503
Headline earnings attributable to linked unitholders 117 533 4 322
DISTRIBUTABLE EARNINGS:
Revenue 216 883 165 860
Property expenses (74 948) (57 875)
Other income 1 967 926
Less gain on bargain purchase - (830)
Other operating expenses (3 169) (15 274)
Add back listing costs - 13 469
Asset management fees (8 120) (5 359)
Net finance cost (39 205) (23 080)
Finance income 1 616 2 005
Finance cost (40 821) (25 085)
Taxation (234) (25)
Distributable earnings 93 174 77 813
GROUP
30 June 30 June
R’000 2013 2012
Reconciliation of earnings to distributable earnings:
Earnings attributable to linked unitholders 236 619 97 236
Straight-line rental adjustment (12 957) (5 994)
Gain on bargain purchase - (830)
Listing costs - 13 469
Finance cost amortisation - 45 695
Fair value adjustments (45 405) (106 836)
Deferred tax (85 083) 35 073
93 174 77 813
BASIS OF PRESENTATION
These audited consolidated financial statements have been prepared in accordance with the Listing
Requirements of the JSE Limited, the recognition and measurement requirements of International
Financial Reporting Standards (IFRS), presentation and disclosure requirements of IAS34, the South
African Institute of Chartered Accountants (SAICA) financial reporting guidelines as issued by the
Accounting Practices Committee (APC) and financial reporting pronouncements as issued by the
Financial Reporting Standards Committee and the requirements of the Companies Act of South Africa.
The accounting policies as set out in the audited financial statements for the year ended 30 June
2013 are in terms of IFRS and have been consistently applied when compared to the previous
accounting period. These consolidated financial statements incorporate the financial statements of
the company and its subsidiaries that in substance are controlled by the Group. Results of subsidiaries
are included from the effective date of acquisition up to the effective date of disposal. All significant
transactions and balances between Group enterprises are eliminated on consolidation.
BUSINESS COMBINATIONS
2012/2013
On 7 August 2012, the Fund acquired the property known as Brickfield, situated at 5-9 Brickfield
Road, Salt River with a gross lettable area measuring 5 251m2. The purchase price of R20 million was
settled in cash.
The property known as Business Centre with a gross lettable area measuring 4 886m2 was acquired
on 6 November 2012 and is situated at 377 Rivonia Boulevard, Sandton. The purchase price of R64.5
million was settled in cash.
The table below indicates the net assets acquired in respect of the above-mentioned business
combinations:
Brickfield Business Total
GROUP Centre
Net assets acquired: R’000 R’000 R’000
Net assets acquired
Investment property 20 004 64 579 84 583
After tax profits since acquisition 1 751 3 998 5 749
Full year after tax profits 1 880 6 157 8 037
OPERATING SEGMENTS
The Group has seven reportable segments based on the geographic split of the country which are
the Group's strategic business segments. For each strategic business segments, the Group's CEO (the
Chief Operating Decision Maker) reviews internal management reports on at least a monthly basis.
All segments are located in South Africa. There are no single major customers.
The following summary describes the operations in each of the Group’s reportable segments:
Head Kwa-Zulu Northern
R’000 Office Gauteng Natal Province
Extracts from the statement of
comprehensive income 30 June 2013
Investment property income - 135 597 3 556 1 093
Straight-line rental adjustment - 3 261 31 64
Property expenses (504) (51 277) (1 044) (209)
Segment results (504) 87 581 2 543 948
Extracts from the statement of financial
position as at 30 June 2013
Investment property
Opening balance - 864 439 29 552 9 495
Additions through business combinations - 64 579 - -
Other additions - 4 767 - -
Straight-line rental adjustment - 3 261 31 64
Cumulative fair value adjustments - 36 845 (346) 187
Closing balance - 973 891 29 237 9 746
Western Eastern North
R’000 Cape Cape West Total
Extracts from the statement of
comprehensive income 30 June 2013
Investment property income 57 032 11 938 7 667 216 883
Straight-line rental adjustment 8 266 713 622 12 957
Property expenses (17 619) (2 800) (1 495) (74 948)
Segment results 47 679 9 851 6 794 154 892
Extracts from the statement of financial
position as at 30 June 2013
Investment property
Opening balance 376 310 89 599 56 999 1 426 394
Additions through business combinations 20 004 - - 84 583
Other additions 2 402 244 - 7 413
Straight-line rental adjustment 8 266 713 622 12 957
Cumulative fair value adjustments (4 406) 1 943 2 097 36 320
Closing balance 402 576 92 499 59 718 1 567 667
Head Kwa-Zulu Northern
R’000 Office Gauteng Natal Province
Extracts from the statement of
comprehensive income 30 June 2012
Investment property income - 121 832 3 269 1 001
Straight-line rental adjustment - 1 869 32 (57)
Property expenses (1 353) (43 196) (894) (171)
Segment results (1 353) 80 505 2 407 773
Extracts from the statement of financial
position as at 30 June 2012
Investment property
Opening balance - 672 258 24 542 7 693
Additions through business combinations - 121 749 - -
Other additions - 3 565 - -
Straight-line rental adjustment - 1 869 32 (57)
Cumulative fair value adjustments - 64 998 4 978 1 859
Closing balance - 864 439 29 552 9 495
Western Eastern North
R’000 Cape Cape West Total
Extracts from the statement of
comprehensive income 30 June 2012
Investment property income 28 284 7 567 3 907 165 860
Straight-line rental adjustment 3 512 214 424 5 994
Property expenses (10 124) (1 458) (678) (57 874)
Segment results 21 672 6 323 3 653 113 980
Extracts from the statement of financial
position as at 30 June 2012
Investment property
Opening balance 55 944 22 000 - 782 437
Additions through business combinations 288 198 52 185 53 083 515 215
Other additions 320 3 256 - 7 141
Straight-line rental adjustment 3 512 214 424 5 994
Cumulative fair value adjustments 28 336 11 944 3 492 115 607
Closing balance 376 310 89 599 56 999 1 426 394
EVENTS AFTER THE REPORTING DATE
On 23 July 2013, the unitholders of the Fund voted in favour of the acquisition of the Greenstone Hill
acquisition. The acquisition comprises 10 buildings in total. The Fund will therefore acquire the entire
share capital and claims of Greenstone Hill Office Park Proprietary Limited in which 8 of the buildings
are housed and 2 properties which are directly owned by Barrow Properties Proprietary Limited.
The Fund further embarked on a rights offer to raise R455 million, as mentioned above.
Details of the Greenstone Hill acquisition:
Description of property: Buildings 2, 4, 5, 6 and 10-15 of the sectional title schemes
known as Greenstone Hill Office Park SS1149/2008 and
SS599/2009, and associated exclusive use areas, situated at Erf
1841 Greenstone Hill Extension 22 Township, Gauteng.
Region: Gauteng
Sector: Commercial
Vacancy: 525m2
Gross lettable area (GLA): 17 571m2
Property description and use: Buildings/Offices
AUDIT REPORT
The Group's auditor, KPMG Inc., have issued an unmodified audit opinion on the complete set of
audited financial statements for the year ended 30 June 2013. Their audit report is available for
inspection at the registered office of the Company.
STATEMENT ON GOING CONCERN
The directors have made an assessment of the Group’s ability to continue as a going concern and
have no reason to believe the business will not be a going concern in the year ahead.
MANAGEMENT
VPIF is fortunate to have retained the same leadership team since its formation five years ago. Their
collective experience and commitment has undoubtedly proved beneficial to the establishment and
growth of VPIF and we are confident that they will prove their worth once again.
CASH DISTRIBUTION WITH THE OPTION TO ELECT TO RE-INVEST THE CASH
DISTRIBUTION IN RETURN FOR VPIF UNITS
Notice is hereby given of debenture interest payment number 4 of 39.25 cents per linked unit for the
six months ended 30 June 2013.
Linked unitholders will be entitled to elect to re-invest the cash distribution in return for linked units
(“Linked Unit Alternative”), failing which they will receive the cash distribution in respect of all or
part of their unitholding.
Dematerialised linked unitholders are required to notify their duly appointed CSDP or broker of their
election in the manner and time stipulated in the custody agreement entered into between them and
their CSDP or broker.
Summary of the salient dates relating to the cash distribution are as follow:
2013
Circular and Form of Election posted to unitholders Friday, 30 August
Finalisation information announcement including linked unit alternative Friday, 6 September
issue price (“finalisation date”)
Last day to trade (“LDT”) cum distribution Friday, 13 September
Linked units trade ex distribution Monday, 16 September
Listing of maximum possible number of linked units on the JSE at the Tuesday, 17 September
commencement of business
Last day to elect to receive the linked unit alternative by 12h00 (No late Friday, 20 September
Forms of Election will be accepted)
Record date Friday, 20 September
Announcement of results of cash distribution and linked unit alternative on Monday, 23 September
SENS
Cash distributions posted to any certificated linked unitholders and Monday, 23 September
accounts credited by CSDP or broker of dematerialised linked unitholders
on or about
Linked unit certificates posted to any certificated linked unitholders and Wednesday, 25
accounts credited by CSDP or broker of dematerialised linked unitholders September
electing the linked unit alternative on or about
Announcement of results of cash distribution and linked unit alternative in Wednesday, 25
the press September
Adjustment of maximum number of linked units listed on the JSE to reflect Wednesday, 25
the actual number of linked units issued September
Notes:
Linked units may not be dematerialised or rematerialised between Monday, 16 September 2013 and
Friday, 20 September 2013, both days inclusive.
All times indicated are South African times.
The above dates and times are subject to change and any changes will be released on SENS and
published in the press.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given to unitholders that the annual general meeting of unitholders of the Company
will be held in the boardroom, Vunani House, 151 Katherine Street, Sandton at 11:00 on Friday 27
September 2013.
The following salient dates apply to the annual general meeting:
Last day to trade to be eligible to vote at the Annual Friday, 13 September 2013
General Meeting.
Record date for determining those shareholders entitled Friday, 20 September 2013
to vote at the Annual General Meeting.
Last day for receipt of forms of proxy for the Annual By 11:00 on Wednesday, 25 September
General Meeting (or they may be handed to the 2013
Chairman at the meeting).
INTEGRATED ANNUAL REPORT
The Integrated Annual Report for the year ended 30 June 2013, incorporating the notice of annual
general meeting will be mailed to unit holders on 26 August 2013.
Sandton
19 August 2013
Sponsor
Grindrod Bank Limited
Corporate Adviser
Vunani Corporate Finance
Date: 19/08/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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