Wrap Text
Reviewed Condensed Group Results and Interim Distribution for the six months ended 30 September 2013
Sycom Property Fund
("Sycom" or the "Fund")
A Collective Investment Scheme in property registered in
terms of the Collective Investment Schemes Control Act, No. 45 of 2002 and managed by Sycom Property
Fund Managers Limited (Registration number 1986/002756/06)
JSE Share code: SYC
ISIN: ZAE000019303
(Granted REIT status with the JSE Limited)
REVIEWED CONDENSED GROUP RESULTS AND DECLARATION OF THE INTERIM DISTRIBUTION FOR THE SIX MONTHS ENDED
30 SEPTEMBER 2013
The directors of Sycom Property Fund Managers Limited, the management company of Sycom Property Fund, submit their report on
the reviewed results of Sycom for the six months ended 30 September 2013.
CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED
30 SEPTEMBER 2013
Reviewed six Unaudited six Audited twelve
months to months to months to
30 Sep 2013 30 Sep 2012 31 Mar 2013
(R'000) (R'000) (R'000)
Revenue 369 413 297 992 651 352
Contractual rental revenue and recoveries 367 290 286 772 621 425
Straight-lining of rental revenue adjustment 2 123 11 220 29 927
Direct property operating expenses (72 972) (52 734) (109 791)
Selling costs on investment properties held for sale (4 116) - -
Net rental and related revenue 292 325 245 258 541 561
Investment income 9 655 7 581 15 961
Fair value adjustments to investment properties and listed
investment 301 262 (35 247) 721 507
Fair value gain/(loss) on investment properties 250 897 (11 220) 719 667
Fair value gain/(loss) on listed investment 50 365 (24 027) 1 840
Administrative expenses (23 452) (17 946) (38 429)
Service charge (21 347) (17 013) (37 178)
Other administrative expenses (2 105) (933) (1 251)
Profit before net finance costs 579 790 199 646 1 240 600
Net finance costs (51 869) (14 890) (60 227)
Interest income 26 787 24 612 37 500
Interest expense (68 639) (38 388) (91 537)
Net change in fair value of derivative financial instruments at fair value
through profit and loss (10 017) (1 114) (6 190)
Profit before taxation 527 921 184 756 1 180 373
Taxation (556) - (96)
Profit for the period 527 365 184 756 1 180 277
Other comprehensive income for the period
Net change in fair value of cash flow hedges * 34 881 - -
Other comprehensive income for the period 34 881 - -
Total comprehensive income for the period 562 246 184 756 1 180 277
Basic and diluted earnings per unit - cents 194.48 74.32 474.76
*The fair value movement on the cash flow hedges through other comprehensive income may be reclassified to profit and loss.
RECONCILIATION OF PROFIT FOR THE PERIOD TO HEADLINE EARNINGS AND DISTRIBUTABLE EARNINGS
Profit for the period 527 365 184 756 1 180 277
Fair value adjustment to investment properties (250 897) 11 220 (719 571)
Taxation 556 - -
Headline earnings 277 024 195 976 460 706
Selling costs on investment properties held for sale 4 116 - -
Straight-line rental income accrual (2 123) (11 220) (29 927)
Unrealised deficit on derivative financial instruments 10 017 1 114 6 190
Fair value adjustment to listed investment (50 365) 24 027 (1 840)
Prepaid distribution 9 492 - -
Distributable earnings 248 161 209 897 435 129
Earnings per unit (cents):
Basic and diluted earnings per unit - cents 194.48 74.32 474.76
Basic and diluted headline earnings per unit - cents 102.16 78.83 185.32
Distribution per unit - cents 88.12 84.43 175.03
Number of units in issue ('000) 281 632 248 604 248 604
Number of weighted average units in issue ('000) 271 164 248 604 248 604
CONDENSED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2013
Reviewed at Unaudited at Audited at
30 Sep 2013 30 Sep 2012 31 Mar 2013
(R'000) (R'000) (R'000)
ASSETS
Property assets 8 642 158 6 228 966 8 378 608
Investment properties and related receivables 7 078 258 6 228 966 8 378 608
Investment properties 6 835 209 6 046 002 8 120 486
Non-current straight lining receivable 213 869 163 298 232 662
Current straight-lining receivable 29 180 19 666 25 460
Investment properties held for sale and related receivables 1 563 900 - -
Investment properties held for sale 1 546 704 - -
Straight-lining receivable 17 196 - -
Other non-current assets 403 474 277 794 310 722
Listed Investment 368 593 277 698 310 722
Derivative financial instruments 34 881 - -
Deferred Taxation - 96 -
Current assets 1 181 640 676 773 298 019
Rental and other receivables 85 841 67 167 82 894
Dividends receivable 9 655 7 581 8 380
Cash and cash equivalents 1 086 144 602 025 206 745
Total assets 10 227 272 7 183 533 8 987 349
UNITHOLDERS' FUNDS AND LIABILITIES
Unitholders' funds 7 880 388 5 937 054 6 707 343
Unitholders' capital 3 428 516 2 579 048 2 579 048
Non-distributable reserves 4 451 872 3 358 006 4 128 295
Non-current liabilities 1 974 463 919 790 1 933 545
Borrowings 1 930 284 919 790 1 900 808
Derivative financial instruments 44 179 - 32 737
Current liabilities 372 421 326 689 346 461
Trade and other payables 115 865 79 312 111 409
Derivative financial instruments 8 395 37 480 9 820
Unitholders for distribution 248 161 209 897 225 232
Total unitholders' funds and liabilities 10 227 272 7 183 533 8 987 349
Net asset value per unit - cents 2 798 2 388 2 698
CONDENSED STATEMENT OF CHANGES IN UNITHOLDERS' FUNDS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2013
Non-
distributable Retained
Capital reserve earnings Total
(R'000) (R'000) (R'000) (R'000)
Balance at 31 March 2012 2 579 048 3 383 147 - 5 962 195
Transactions with owners, recognised directly in equity - - - -
Total comprehensive income for the period - - 184 756 184 756
Transfer to non-distributable reserve
- (25 141) 25 141 -
Unitholders distribution - - (209 897) (209 897)
Balance at 30 September 2012 2 579 048 3 358 006 - 5 937 054
Transactions with owners, recognised directly in equity - - - -
Total comprehensive income for the period - - 995 521 995 521
Transfer to non-distributable reserve - 770 289 (770 289) -
Unitholders distribution - - (225 232) (225 232)
Balance at 31 March 2013 2 579 048 4 128 295 - 6 707 343
Transactions with owners, recognised directly in equity
Issue of 33 027 523 units in May 2013 * 849 468 - 9 492 858 960
Proceeds 900 000 - - 900 000
Capitalised unit issue costs (11 117) - - (11 117)
Prepaid distribution to 31 March 2013 (29 923) - 29 923 -
Payment of prepaid distribution in July 2013 - - (29 923) (29 923)
Prepaid distribution 2014 period (9 492) - 9 492 -
Total comprehensive income for the period
Profit for the period - - 527 365 527 365
Other comprehensive income for the period - 34 881 - 34 881
Net change in fair value of cash flow hedge recognised directly
in other comprehensive income - 34 881 - 34 881
Total comprehensive income for the period - 34 881 527 365 562 246
Transfer to non-distributable reserve - 288 696 (288 696) -
Unitholders' distribution - - (248 161) (248 161)
Balance at 30 September 2013 3 428 516 4 451 872 - 7 880 388
* Sycom undertook a fully underwritten renounceable Rights Offer in May 2013 whereby R900 000 002 was raised by way of the issue of 33
027 523 new Sycom units to qualifying unitholders at a subscription price of 2725 cents (R27.25) per Rights Offer unit.
CONDENSED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED
30 SEPTEMBER 2013
Reviewed at Unaudited at Audited at
30 Sep 2013 30 Sep 2012 31 Mar 2013
(R'000) (R'000) (R'000)
Cash utilised in operating activities
Cash generated from operations * 279 104 33 144 296 620
Dividend received ** 833 6 860 7 654
Distribution paid (255 155) (212 833) (422 730)
Interest paid (80 226) (39 037) (82 399)
Interest received 27 462 24 612 36 825
Tax paid (556) - -
Net cash utilised in operating activities (28 538) (187 254) (164 030)
Cash flows utilised in investing activities
Subsequent expenditure on investment properties (9 868) (114 089) (1 513 861)
Subsequent expenditure on investment properties held for sale (1 017) - -
Subscription to Rights Issue - (64 969) (64 967)
Net cash outflow from investing activities (10 885) (179 058) (1 578 828)
Cash flows from financing activities
-
Gross proceeds from the issue of units in May 2013 900 000 -
-
Unit issue costs (11 117) -
Increase in borrowings 29 476 86 324 1 067 342
Net cash inflow from financing activities 918 359 86 324 1 067 342
Net increase/(decrease) in cash and cash equivalents 878 936 (279 988) (675 516)
Cash and cash equivalents at the beginning of the period 206 745 882 055 882 055
Effect of exchange fluctuations on cash held 463 (42) 206
Cash and cash equivalents at the end of the period 1 086 144 602 025 206 745
* The comparative figures include investment property acquisitions accrued for at 31 March 2012 and paid on transfer date.
** 90% of the dividend income relating to the dividend due at 31 March 2013 from Stenham European Shopping Centre Fund was received
in the form of scrip shares. The dividend declared by Stenham for the six months ended 30 September 2013 was still receivable at the period
end.
NOTES
1. BASIS OF PREPARATION AND REVIEW OPINION
The condensed consolidated interim financial statements are prepared and presented in accordance with International Financial Reporting
Standards, which include International Accounting Standard (IAS) 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee and the requirements of the Collective Investment Schemes Control Act, 2002. The same
accounting policies and methods of computation are followed in the interim financial report as compared to the most recent annual financial
statements except for the adoption of the newly effective standards as described below. The key estimates and assumptions used in the
interim financial statements are the same as the ones used in the annual financial statements. The condensed consolidated results have been
prepared under the supervision of the group's financial director, Baden Marlow.
The following standards are being applied for the first time as they became effective during the current period:
IFRS 10 - Consolidated Financial Statements
IFRS 11 - Joint Arrangements
IFRS 12 - Disclosure of Interests in Other Entities
IFRS 13 - Fair value measurement
The condensed consolidated financial statements of Sycom Property Fund for the six months ended 30 September 2013 have been reviewed
by the company's auditor, KPMG Inc. In their review report dated 14 November 2013, which is available for inspection at Sycom's Registered
Office, KPMG Inc state that their review was conducted in accordance with the International Standard on Review Engagements 2410, Review
of Interim Information Performed by the Independent Auditor of the Entity, and have expressed an unmodified conclusion on the condensed
consolidated interim financial statements.
2. CONDENSED SEGMENTAL RESULTS
for the 6 months ended 30 September 2013
RETAIL OFFICES
(R'000) (R'000)
Segment revenue 167 916 199 374
Straight-line rental income accrual 1 540 583
Dividend income 9 655 -
Total revenue 179 111 199 957
Operating expenditure (33 105) (39 867)
Selling costs on investment properties held for sale (4 100) (16)
Net finance cost 305 748
Segmental net operating income 142 211 160 822
Fair value adjustments
South Africa 112 117 138 780
International 50 365 -
Segmental earnings 304 693 299 602
Reconciliation to profit before taxation in the statement of comprehensive income
Allocated Unallocated Total
Rental revenue 367 290 - 367 290
Straight-line rental income accrual 2 123 - 2 123
Dividend income 9 655 - 9 655
Total revenue 379 068 - 379 068
Operating expenditure (72 972) (23 452) (96 424)
Selling costs on investment properties held for sale (4 116) - (4 116)
Net finance cost 1 053 (42 905) (41 852)
Net operating income 303 033 (66 357) 236 676
Fair value adjustment to investment properties 250 897 - 250 897
Fair value adjustment to listed investment 50 365 - 50 365
Fair value adjustment on interest rate and cross
currency swaps - (10 017) (10 017)
Profit before taxation 604 295 (76 374) 527 921
TOTAL RETAIL OFFICES
Investment property assets
8 642 158 4 175 058 4 467 100
3. CONDENSED SEGMENTAL RESULTS
for the 6 months ended 30 September 2012
RETAIL OFFICES
(R'000) (R'000)
Segment revenue 155 266 131 506
Straight-line rental income accrual 4 361 6 859
Dividend income 7 581 -
Total revenue 167 208 138 365
Operating expenditure (26 623) (26 111)
Net finance cost 232 417
Segmental net operating income 140 817 112 671
Fair value adjustments
South Africa (4 361) (6 859)
International (24 027) -
Segmental Earnings 112 429 105 812
Reconciliation to profit before taxation in the statement of comprehensive income
Allocated Unallocated Total
Rental revenue 286 772 - 286 772
Straight-line rental income accrual 11 220 - 11 220
Dividend income 7 581 - 7 581
Total revenue 305 573 - 305 573
Operating expenditure (52 734) (17 946) (70 680)
Net finance cost 649 (14 425) (13 776)
Net operating income 253 488 (32 371) 221 117
Fair value adjustment to investment properties (11 220) - (11 220)
Fair value adjustment to listed investment (24 027) - (24 027)
Fair value adjustment on interest rate and cross
currency swaps - (1 114) (1 114)
Profit before taxation 218 241 (33 485) 184 756
TOTAL RETAIL OFFICES
Investment property assets
6 228 966 3 442 985 2 785 981
4. FAIR VALUE OF FINANCIAL INSTRUMENTS RECOGNISED IN THE STATEMENT OF FINANCIAL POSITION
The group measures fair values using the following hierarchy that reflects the significance of the inputs used in
making the measurements:
- Level 1: Quoted prices (unadjusted) in an active market for an identical instrument.
- Level 2: Valuation techniques based on observable inputs, either directly (ie: as prices) or indirectly (ie: derived from prices). This
category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or
similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or
indirectly observable from market data.
- Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique
includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This
category also includes instruments that are valued based on quoted prices for similar instruments where significant unobservable
adjustments or assumptions are required to reflect differences between the instruments.
The group uses widely recognised valuation models for determining the fair value of common and more simple financial instruments, like the
interest rate and currency swaps that use only observable market data and require little management judgement and estimation. The
interest rate swaps and cross currency swap are valued using the Mark to Market valuations, excluding transactions costs, as determined by
Nedbank. The investment in Stenham European Shopping Centre Fund (listed investment) is an investment in a closed fund without a quoted
price. The significant underlying asset per the statement of financial position of Stenham is the investment property balance, which is valued
using observable market data. Sycom's valuation of Stenham is based on the net asset value of the investment translated at the period end
ruling exchange rate. Availability of observable market prices and model inputs reduces the need for management judgement and estimation
and also reduces the uncertainty associated with determination of fair values.
The table below analyses financial instruments carried at fair value, by valuation method.
Level 1 Level 2 Level 3 Total
30 September 2013
Financial assets
Listed investment - 368 593 - 368 593
Interest rate swaps - 34 881 - 34 881
Financial liability
Cross currency and interest rate swaps - (52 574) - (52 574)
30 September 2012
Financial asset
Listed investment - 277 698 - 277 698
Financial liability
Cross currency and interest rate swaps - (37 480) - (37 480)
5. INVESTMENT PROPERTY HELD FOR SALE
The following investment properties have been classified as held for sale at 30 September 2013:
Somerset Mall (50% owned):
Sycom has concluded an agreement with Hyprop Investments Limited ("Hyprop") in terms of which Hyprop will acquire the full ownership of
Somerset Mall (post Sycom's acquisition of the remaining 50% from AECI Pension Fund on 1 October 2013 for R1 150 000 000) from Sycom
for a total consideration of R2 300 000 000. This transaction was effected on 1 October 2013. The gain on remeasurement of the property to
fair value at the reporting date amounted to R11 920 790 and is disclosed within the fair value gain on investment properties caption on the
statement of profit or loss and other comprehensive income. Somerset Mall is a Retail asset for the purposes of the segmental reporting per
notes 2 and 3 above.
Discovery House (100% owned)
Sycom has entered into a sale agreement to dispose of the Discovery building to The Truzen 113 Trust (c/o Zenprop Property Holdings) for
an amount of R413 900 000. The transaction will be effective on transfer date, which is expected before the financial year end. The gain on
remeasurement of the property to fair value at the reporting date amounted to R5 462 030 and is disclosed within the fair value gain on
investment properties caption on the statement of profit or loss and other comprehensive income. Discovery House is an Offices asset for the
purposes of the segmental reporting per note 2 and 3 above.
COMMENTARY
1. REVIEW OF RESULTS AND OPERATIONS
The period under review has been one of significant acquisition, disposal and redevelopment activity for the
Fund, in line with the board's policy of continuously improving the portfolio and enhancing its income growth
potential. An undivided half share was acquired in the Greenacres Shopping Centre, one of the Eastern
Cape's premier retail properties, and a significant expansion and redevelopment of Vaal Mall was approved,
to commence in the early part of 2014. These two activities will add close to R1bn to the value of the Fund's
retail portfolio. There were also two strategic disposals, the first being Sycom's minority stakes in Southgate
Mall and Value Mart (concluded shortly after the period end), and the second being the sale of the Discovery
building in Sandton.
The board of Sycom Property Fund Managers Limited (SPFM') reports a distribution of 88.12 cents per unit
(cpu) for the six months ended 30 September 2013, an increase of 4.4% over the comparative period last
year. With distribution growth of over 7% expected in the second half of the financial year, these interim
results are in line with guidance provided for the full year to 31 March 2014.
Retail portfolio
Sycom's South African retail portfolio continued to show good underlying growth, with tenants reporting a 5%
increase in their turnovers for the 12 months to 30 September 2013 compared to the same period in the
previous year. N1 City and Vaal Mall were again the top performers in terms of growth, delivering reported
growth in tenant turnovers of 7.7% and 5.3% respectively.
During the period under review, leases totalling 8,550m2 terminated at an average rental of R201.72/m2.
Leases totalling 7,192m2 were concluded at an average rental of R228.03/m2 a 13% upward reversion.
Expiries in the remaining six months of the 2014 financial year will amount to 12,287m2, terminating at an
average rental of R194.09/m2. These leases are expected to be renewed at an average rate of R202/m2,
representing a 4.1% positive reversion.
Office portfolio
Demand for "A" grade offices remained soft during the period under review, with the vacancy rate increasing
from 3.1% at 31 March 2013 to 4.9% at the end of September 2013. Leases were concluded on 13,844m2 of
GLA during the period, at an average gross rate of R141.02/m2. This was 6.6% lower than the average gross
terminating rental of R150.97/m2 on the 20,311m2 which terminated over this period.
In the next six months, leases for 18,192m2 will expire at an average gross rental of R135.36/m2, and these
are expected to be renewed at R140.50/m2, representing a 3.8% positive reversion.
2. ACQUISITIONS, EXPANSIONS AND DISPOSALS
Greenacres acquisition
On 21 October 2013 Sycom and Acucap announced the joint acquisition of the Greenacres Shopping Centre
for R1.016bn, at an initial yield of 7.7%. Each of the two funds acquired an undivided 50% share in
Greenacres for R508m. With a Gross Lettable Area (GLA) of 40,767m2, Greenacres is one of three retail
properties that together comprise a single combined shopping mall of 89,529m2 GLA, the other two
properties being The Bridge @ Greenacres (44,062m2 GLA) in which Acucap owns 27.5% and a stand-alone
Woolworths store that is owned by Woolworths (4,700m2 GLA). With a major mall upgrade and planned
extensions of over 12,000m2 at Greenacres itself, the combined mall will expand to over 100,000m2,
reinforcing its status as one of the Eastern Cape's premier retail products.
Good trading density, supported by over one million shoppers per month, has resulted in strong interest from
all the major fashion retailers at Greenacres to either expand their stores or introduce new brands. Plans will
also be developed to upgrade the mall and offer a contemporary, easier and more pleasant shopping
experience.
The acquisition will be funded with debt facilities that Sycom has in place, at an average cost of 7.6%. After
the Greenacres acquisition, Sycom will have a gearing ratio of just under 33%.
Vaal Mall expansion
The R442 million redevelopment of Vaal Mall is set to commence in January 2014. Sycom's share of the capital
cost will be R344 million, at an expected initial yield of 8.5%. The project will add approximately 22,000m2 of GLA,
taking Vaal Mall to just over 70,000m2 , and will include major expansions for Woolworths, Truworths, Edgars
and Game, as well as the introduction of cinemas. The anticipated completion date is October 2015.
Hyprop transaction and Somerset Mall
The Hyprop transaction was successfully concluded on the effective date of 1 October 2013, in terms of
which Somerset Mall was transferred to Hyprop in exchange for the tendering of 81.5m units in Sycom.
These units have been cancelled, with the result that Hyprop's interest in Sycom reduces to 1.4% and
Acucap's holding increases to 33.5%, as more fully reflected in section 6 below.
Discovery Building disposal
Prior to the half year end, Sycom entered into an agreement with an associate of Zenprop and with Redefine
Properties (acting jointly) to dispose of the Discovery Building on Fredman Drive, Sandton. The sale price of
R413.9m represents a forward yield of 8.15%. The independent valuation of the Discovery Building was
R408m at 31 March 2013. Discovery Health has committed to relocating to new and much larger offices in
Sandton, and the board's decision to dispose of this building was based on the large single tenant exposure,
the short remaining lease tenure and the certainty of the tenant vacating at the end of its lease.
Southgate disposal
Subsequent to the half year end, an agreement has been entered into with Pareto Limited to dispose of
Sycom's 16.61% interest in Southgate Mall and its 16.01% interest in Southgate Value Mart for a combined
sale price of R249.3 million, representing a yield of 8.3%. These properties were valued at R230.6m at 31 March
2013. The board's view was that Sycom's holding in these two properties was too small to influence the
performance of the fund, and since there was no prospect of increasing its stake, the decision was taken to
dispose of Sycom's minority interest.
3. BORROWINGS
During the six months under review, Sycom negotiated additional debt facilities of R600m with Rand
Merchant Bank, taking its total facilities to R2.9 billion, of which R2.25bn has been utilised. This represents a
gearing ratio of 29.5%. During the same period, the Fund entered into new forward starting swaps for R1.5billion,
the effect of which was to increase Sycom's interest rate hedging to 66.8% of borrowings. After the
conclusion of the Somerset Mall transaction referred to in section 2 above, Sycom's borrowing profile is as
follows:
Borrowings at 30
September 2013 1 930 284
Cash in Annex account -849 245
Net borrowings 1 081 039
Acquisition of Somerset Mall 1 165 000
Adjusted borrowings 2 246 039
Property assets at 30 September 2013 8 642 158
less Somerset Mall -1 150 000
Adjusted property assets 7 492 158
Investment in Stenham 368 593
Assets 7 860 751
LTV 28.6%
Forward starting SWAPS as % of
adjusted borrowings 66.8%
Forward starting swaps entered into
effective
Start End rate Amount Rm
17-Mar-14 17-Mar-17 7.29% 200
31-Mar-14 31-Mar-17 7.29% 200
9-Apr-14 9-Apr-18 7.60% 100
30-Sep-14 30-Sep-17 7.55% 200
31-Mar-15 31-Mar-18 7.81% 300
30-Sep-15 30-Sep-18 9.15% 300
31-Mar-16 31-Mar-20 9.65% 100
31-Mar-16 31-Mar-21 9.84% 100
Total 8.15% 1 500
4 FORWARD LEASE EXPIRIES
The expiry profile by rental income is shown below:
Total Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 thereafter
Offices 62.5% 4.9% 8.4% 10.6% 26.5% 6.4% 5.7%
Retail 37.5% 4.7% 4.9% 11.4% 10.1% 3.2% 3.2%
Total 100.0% 9.6% 13.3% 22.0% 36.6.7% 9.6% 8.9%
The relatively high office expiry percentage in the year ending March 2018 is due to the expiry of the Deloitte
lease in Woodlands. Negotiations are already under way with Deloitte to substantially re-work their office
space and extend this lease. There are no other individually significant expiries in Sycom's portfolio.
5. VACANCIES AND BAD DEBTS
The table below provides details of Sycom's vacancies from March 2012 to September 2013, expressed by
area.
Sept-13 Mar-13 Mar-12
Retail vacancy 3.0% 1.8% 2.2%
Office vacancy 6.0% 3.1% 5.1%
Total vacancy 4.9% 2.6% 3.7%
The increase in the retail vacancy is concentrated in the upper level at Fourways Crossing and at Southgate
Value Mart. Office vacancies were adversely affected by slow progress in leasing a building in the
Harrowdene Park where the lease had expired, and by an unexpected tenant failure. Together these account
for approximately 1.5% of the office vacancy, which would otherwise be around 4.5%.
The impairment provision at 30 September 2013 increased by R600,000 to R1.88 million from R1.28 million at 31
March 2013. Bad debts written off for the six months amounted to R470,000 compared to R1.25m for the
year ending 31 March 2013. The board does not expect any abnormal provisions or write offs.
6. UNITHOLDER SUMMARY
A summary of Sycom's major unitholders at 30 September 2013, adjusted for the cancellation of the Hyprop
units in October 2013, is shown below, with a comparison to 31 March 2013.
Major unitholders
30 Sept 2013 31 Mar 2013
Hyprop 1.4% 33.9%
Acucap 33.5% 19.6%
Stanlib 8.9% 5.2%
Government Employees Pension Fund 6.7% 4.8%
Old Mutual Investment Group 5.6% 3.8%
56.1% 67.3%
7. PROSPECTS
The board confirms the guidance issued in Sycom's March 2013 results announcement, and expects
distribution growth in the order of 6% for the full year ending 31 March 2014. Taking into account first half
distribution growth of 4.4%, the board expects distributions to increase by just over 7% in the second half of
the current financial year compared to the same period last year. For the financial years from 2015 to 2018,
the board expects average distribution growth of between 7% and 8%.
The above information has not been reviewed or reported on by Sycom's auditors.
8. PAYMENT OF INTEREST
Notice is hereby given of the declaration of distribution number 57 in respect of the six months to 30
September 2013. The interim distribution of 88.12 (eighty eight comma one two) cents per unit has been
approved in respect of the six month period ended 30 September 2013. The last date to trade the units cum
distribution is Friday, 29 November 2013 and the record date will be Friday, 6 December 2013. The units will
start trading ex-distribution from Monday, 2 December 2013. Distributions will be made to unitholders on
Monday 9 December 2013.
Unit certificates may not be dematerialised or rematerialised between Monday, 2 December 2013 and Friday,
6 December 2013 both days inclusive.
As Sycom has REIT status with the JSE, the distribution will be treated as taxable dividends in the hands of
local tax residents and taxable dividends for dividends tax purposes for foreign tax residents from 1 January
2014.This distribution relates to the financial year ending 31 March 2014.
On behalf of the Board
GK EVERINGHAM PA THEODOSIOU
Chairman CEO
Sycom Property Fund Managers Ltd Sycom Property Fund Managers Ltd
14 November 2013
Registered Office
Suite A11 Westlake Square
Westlake Drive
Westlake
CAPE TOWN
Sponsor:
Absa Bank Limited (acting through its Corporate and Investment Banking division)
Transfer secretaries:
Computershare Investor Services Proprietary Limited
70 Marshall Street
JOHANNESBURG
http://www.sycom.co.za
Share Code: SYC
ISIN: ZAE 000019303
Directors: GK Everingham (Chairman), MS Moloko (Deputy Chairman), FM Berkeley, JPD Flanagan,
BM Stocks, GR Jones*, CB Marlow*, PA Theodosiou*# (CEO),
* Executive , # British
Company Secretary: HHO Steyn
Date: 14/11/2013 08:47:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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