Wrap Text
Reviewed Financial Results for the year ended 31st March 2014.
INVESTEC PROPERTY FUND LIMITED
Approved as a REIT by the JSE
(Incorporated in the Republic of South Africa)
(Registration Number 2008/011366/06)
Share code: IPF ISIN: ZAE000180915
Reviewed Preliminary Condensed Financial Results for the year ended 31st March 2014
2014
Results
Highlights
Strong letting activity
Final distribution of 57.74 cps 69 167m2
growth on prior year of 11.1% positive reversions
8.6% and 8.5% average escalation
Acquisitions concluded during the period
Full year distribution of 108.20 cps R1.4bn
growth on prior year of Portfolio over 3.4x
8.2% the size since listing
Investment into Australia property market New equity raised
R288.7mn R600mn
18.6% of Investec Oversubscribed
Australia Property Fund accelerated bookbuild
Vacancy improved
from already low position Term debt market accessed
2.6% R500mn
Supported by long Facility in place with
lease expiry profile syndicate of banks
Gearing remains low REIT status obtained
16.8% 1 April 2013
Headroom for growth Capital structure converted
to all equity 16 August 2013
Funding costs secured
in volatile environment
8.5% p.a.* Net asset value per share**
84% hedged and long- up 12.5%on prior year to
dated swap maturity profile 1 398.5 c
Headline EPS up
18.9%
Compared to headline
earnings per linked unit
* Post conclusion of commercial paper
issue and completion of announced
acquisitions.
** Including shares to be issued
Key performance
indicators
Distribution per share/unit Gearing Weighted average swap expiry
2013 2014 2013 2014 2013 2014
99.99 c 108.20 c 10.7% 16.8% 3 years 4 years
Vacancy rate Funding cost* Offshore exposure
2013 2014 2013 2014 2013 2014
2.9% 2.6% 8.2% 8.5%* 0% 4.4%
Gross lettable area Weighted average debt expiry Shares in issue
2013 2014 2013 2014 2013
568 151m2 693 256m2 2.3 years 2.8 years 317 220 000
2014
Property portfolio Hedged position 358 231 620**
2013 2014 2013 2014
R4.2bn R5.8bn 75% 84%*
Gross cost to income ratio Weighed average lease expiry
2013 2014 2013 2014
Total 27.5% 30.1% 4.2 years 4.3 years
Office 23.8% 23.9%
Industrial 28.0% 30.2%
Retail 33.3% 34.7%
* Post conclusion of commercial paper
issue and completion of announced
acquisitions.
** Excluding shares to be issued
Statement of comprehensive income
Year ended Year ended
R'000 31 March 2014 31 March 2013
Revenue, excluding straight-line rental revenue adjustment 520 862 331 398
Straight-line rental revenue adjustment 45 132 43 790
Revenue 565 994 375 188
Property expenses (90 586) (59 669)
Net property income 475 408 315 519
Other operating expenses (5 743) (3 041)
Asset management fee (26 362) (17 834)
Operating profit 443 303 294 644
Fair value adjustments 211 610 (82 856)
Profit on disposal of investment property 10 988 39 066
Income from investment 7 354 –
Finance costs (57 369) (39 184)
Finance income 10 745 25 143
Profit before debenture interest and taxation 626 631 236 813
Debenture interest (119 935) (236 576)
Profit before taxation 506 696 237
Taxation 39 (66)
Profit after taxation 506 735 171
Items that may be reclassified to profit and loss
Other comprehensive income: gain on unrealised
cash flow hedge 276 –
Total comprehensive income attributable to equity holders 507 011 171
Number of shares Shares Linked units
Shares in issue at the end of the period 358 231 620 317 220 000
Shares to be issued 7 345 043 –
Weighted average number of shares in issue 330 736 792 236 430 502
Cents
Distribution per linked unit – 99.99
Earnings per linked unit – 100.13
Headline earnings per linked unit – 119.44
Basic earnings per share 153.30 0.07
Headline earnings/(loss) per share 142.03 (40.60)
Distribution reconciliation
Profit after taxation 506 735 171
Add: Debenture interest 119 935 236 576
Less: Fair value adjustments (211 610) 82 856
Profit on disposal of investment property (10 988) (39 066)
Straight-line rental revenue adjustment (45 132) (43 790)
Antecedent dividends/interest 32 925 11 500
Distributable earnings 391 865 248 246
Less: Interim dividends paid (180 768) (79 618)
Final distribution 211 097 168 628
Dividend per share 108.20 0.07
Statement of financial position
31 March 2014 31 March 2013
R'000
ASSETS
Non-current assets 6 117 243 4 187 000
Investment property 5 708 131 4 115 125
Straight-line rental revenue adjustment 116 702 71 875
Derivative financial instruments 3 714 –
Investment 288 696 –
Current assets 436 082 452 343
Trade and other receivables 77 766 53 613
Cash and cash equivalents 358 316 398 730
Total assets 6 553 325 4 639 343
EQUITY AND LIABILITIES
Shareholders' interest 5 112 629 3 172
Stated capital 4 645 756 3 172
Retained earnings 466 597 –
Cash flow hedge reserve 276 –
Debentures – 3 940 004
Total shareholders'/unitholders' interest 5 112 629 3 943 176
Non-current liabilities 944 864 455 294
Long-term borrowings 944 864 450 000
Other non-current financial liabilities – 5 294
Current liabilities 495 832 240 873
Trade and other payables 415 771 76 625
Current portion of other non-current liabilities 80 017 –
Taxation payable 44 41
Linked unitholders for interest and dividends – 164 207
Total equity and liabilities 6 553 325 4 639 343
Net asset value per share/linked unit (cents)* 1 398.5 1 243.0
*Includes shares to be issued included in equity
Condensed statement of cash flows
R'000 31 March 2014 31 March 2013
Cash generated from operations 390 903 236 976
Finance income received 10 745 20 712
Finance costs paid (48 494) (29 887)
Taxation paid (46) (28)
Distribution paid to shareholders/unitholders (344 975) (163 404)
Net cash flow from operating activities 8 133 64 369
Net cash outflow from investing activities (1 217 547) (1 485 664)
Net cash flow from financing activities 1 169 000 1 815 458
Net (decrease)/increase in cash and cash equivalents (40 414) 394 163
Cash and cash equivalents at beginning of the year 398 730 4 567
Cash and cash equivalents at end of the year 358 316 398 730
Condensed statement of changes in equity
Year ended Year ended
R'000 31 March 2014 31 March 2013
At the beginning of the year 3 172 1 700
Capital conversion 4 088 880 –
Fair value of debentures to stated capital 3 969 175 –
Conversion fees (230) –
Fair value of debenture interest to stated capital 119 935 –
Shares to be issued 100 334 –
Total comprehensive income attributable to equity holders 507 011 171
Issue of ordinary shares 594 000 1 472
Dividends paid to ordinary shareholders (180 768) (171)
Balance at the end of the year 5 112 629 3 172
Condensed segmental information
For the year ended 31 March 2014
R'000 Office Industrial Retail Total
Statement of comprehensive income extracts
Revenue, excluding straight-line rental revenue
adjustment 174 860 134 470 211 532 520 862
Property expenses (28 036) (21 382) (41 168) (90 586)
Segment results 146 824 113 088 170 364 430 276
Statement of financial position extracts
Investment property opening balance 1 499 200 995 550 1 692 250 4 187 000
Net additions, acquisitions and disposals 829 797 278 221 297 826 1 405 844
Fair value adjustment (including straight-lining) 65 218 70 146 96 625 231 989
Fair value of investment property 2 394 215 1 343 917 2 086 701 5 824 833
For the year ended 31 March 2013 Office Industrial Retail Total
R'000
Statement of comprehensive income extracts
Revenue, excluding straight-line rental revenue
adjustment 139 648 115 046 76 704 331 398
Property expenses (23 045) (18 682) (17 942) (59 669)
Segment results 116 603 96 364 58 762 271 729
Statement of financial position extracts
Investment property opening balance 1 182 600 779 800 103 000 2 065 400
Net additions, acquisitions and disposals 266 443 135 071 1 558 056 1 959 570
Fair value adjustment (including straight-lining) 50 157 80 679 31 194 162 030
Fair value of investment property 1 499 200 995 550 1 692 250 4 187 000
Commentary
Introduction
Investec Property Fund Limited is a South African Real Estate Investment Trust having listed on the JSE Limited ("JSE") on
14 April 2011 and obtaining REIT status on 1 April 2013. It currently comprises a portfolio of 69 properties in South Africa with
a total Gross Lettable Area ("GLA") of 693 256m² valued at R5.8bn and a R288.7mn investment in Australia.
The objective of the Fund is to grow its asset base by investing in well priced income producing properties in the office,
industrial and retail sectors to optimise capital and income returns over time for shareholders. Effectively, all rental income,
less operating costs and interest on debt, is distributed to shareholders semi-annually. The Fund does not distribute capital
profits or fair value gains.
Financial results
The board of directors is pleased to announce an 8.6% increase in the final distribution to 57.74 cents per share (cps) for the
six months ended 31 March 2014 (31 March 2013: 53.16 cpu). This brings the total distribution for the year to 108.20 cps,
representing an 8.2% increase over the prior year, supported by performance of the base portfolio and the underlying
property fundamentals of acquisitions made in both the current and previous financial years. Although not material, given its
size relative to the total portfolio, the base portfolio (R2.1bn) grew 5.5%, distorted somewhat by the vacancy of one office
building (6 759m²). If this was normalised, growth in the base portfolio would have been 7.9%. In addition, the results reflect
management's continual focus on tenant retention and strategic lettings with over 69 167m2 of space let during the year,
keeping vacancies low at 2.6% (31 March 2013: 2.9%), one of the lowest levels in the sector.
Top 10 properties
% of % of
Book value portfolio GLA portfolio
Property Sector R'mn by value (m2) GLA
Balfour Mall Retail 348.8 6.0 36 451 5.3
The Firs Office 337.0 5.8 12 679 1.8
Alrode Multipark Industrial 334.0 5.7 90 762 13.1
Woolworths House Office 319.0 5.5 30 435 4.4
Investec Durban Office 245.0 4.2 6 543 0.9
Kriel Mall Retail 236.0 4.1 21 359 3.1
Innovation Group Office 202.0 3.5 15 500 2.2
Great North Plaza Retail 178.5 3.1 13 561 2.0
Nicol Main Office 178.3 3.0 6 616 1.0
Investec Pretoria Office 178.0 3.0 6 301 0.9
Total 2 556.6 43.9 240 207 34.7
Acquisitions and disposals
During the year the Fund completed R1.4bn of property acquisitions, increasing the portfolio by 38% to R5.8bn and
represents a 3.4x increase since listing three years ago. The ability to unlock high quality opportunities in a very competitive
market is a differentiating factor and the last 12 months is testament to this, with all acquisitions sourced from either
Investec Property or through relationships within the Investec network. The acquisitions have brought into the portfolio a
mix of high quality office, retail and industrial properties, tenanted by a majority of national or A-grade tenants.
Sector Cost GLA Date of
Acquisitions (R'mn) (m2) transfer
5 Bond Street Office 118.5 5 870 May 2013
Minolta Belville Office 24.7 2 166 May 2013
Minolta Highveld Industrial 36.3 2 955 May 2013
SA Ladder Industrial 75.1 25 000 April 2013
Bigen Africa Office 125.1 5 412 October 2013
Big Box retail portfolio Retail 208.8 38 475 October 2013
Martin & Martin Industrial 88.6 19 972 December 2013
RPP Industrial and Office 465.3 29 810 March 2014
Nonquebela Mall Link extension Retail 32.2 2 911 March 2014
Nicol Main Office 178.3 6 616 March 2014
Total acquisitions 1 352.9 139 187
Post year-end, the Fund has taken transfer of the Barinors property (R96mn) and McCarthy Menlyn (R115mn).
During the year the Fund disposed of two non-core properties for a total consideration of R40.6mn, resulting in a capital profit
of R10.9mn which was reinvested in the Fund.
Vacancy levels
The overall vacancy rate decreased 30bps to 2.6% on the back of strong renewals and new leases. Across the portfolio,
99.2% of expiring GLA was let/renewed at an average escalation of 8.5% and 11.1% positive reversion. The average in-force
escalation across the portfolio is 8.1%.
Vacancies by sector –— by GLA
Vacancies by sector GLA
Office Industrial Retail Total
Area % of Area % of Area % of Area % of
Letting activity (m²) GLA (m²) GLA (m²) GLA (m²) GLA
Tenanted at
85 244 92.7 285 878 98.2 180 415 97.5 551 537 97.1
31 March 2013
Sold – (13 822) – (13 822)
Acquired* 40 951 56 850 41 386 139 187
Vacated – (60 765) (8 961) (69 726)
New leases/renewals – 59 503 9 664 69 167
GLA adjustments (574) – (534) (1 108)
Tenanted at
31 March 2014 125 621 94.9 327 644 98.0 221 970 98.0 675 235 97.4
Renewals and new leases
Average GLA GLA
Expiry rent New rent escalation expiries and new leases/
Sector R/(m²) R/(m²) (%) cancellations renewals
Office – – – – –
Industrial 32.23 37.63 8.8 (60 765) 59 503
Retail 155.53 150.55 8.1 (8 961) 9 664
Total 48.08 53.41 8.5 (69 726) 69 167
Cost to Income ratio
The Fund's gross cost to income ratio has risen by 2.6% to 30.1%, largely as a result of the change in portfolio composition.
The retail portfolio's cost to income ratio increased by 1.4% with the addition of conventional retail centers, namely Balfour,
Kriel and Nonkqubela, late in FY13. The office ratio remained flat year-on-year through effective management of the
properties, while the industrial portfolio showed a 2.2% increase due to marginally lower electricity recoveries.
Cash on hand
Included in cash and cash equivalents at year-end is R315mn relating to consideration payable under the RPP and Nicol Main
acquisitions (R224mn and R91mn, respectively). The Nicol Main consideration was settled on 1 April 2014. In accordance with
the RPP sale agreement, the R224mn has been set aside by the Fund for the benefit of the vendor and as such is restricted
cash from the Fund's perspective. The consideration will be released upon registration of the transaction in the deeds office,
expected during May/June 2014.
Lease expiry profile by sector
The Fund's lease expiry profile remains very strong with a weighted average lease expiry of 4.3 years by revenue. Of the leases
expiring during the forthcoming financial year, we do not anticipate any material vacancy.
Lease expiry profile by sector - % of total revenue
Geographic spread by GLA
Geographic spread by GLA Geographic spread by revenue
Geographic spread by revenue
GLA Revenue
Eastern Cape 1% Eastern Cape 2%
Free State 1% Free State 2%
Gauteng 75% Gauteng 69%
KwaZulu-Natal 1% KwaZulu-Natal 4%
Limpopo 4% Limpopo 5%
Mpumalanga 3% Mpumalanga 6%
Northern Cape 1% Northern Cape 0%
North West 1% North West 0%
Western Cape 13% Western Cape 12%
Sectoral spread by GLA
Sectoral spread by GLA Sectoral spread by revenue
Sectoral spread
GLA Revenue
Office 19% Office 30%
Industrial 48% Industrial 25%
Retail 33% Retail 45%
Antecedent interest
Included within the distribution reconciliation is R33.0mn of antecedent interest, made up as follows:
R'mn
Accelerated book build (H1 distribution) 20.7
Accelerated book build (H2 distribution) 8.6
RPP transaction (7.3mn shares) 3.7
Total 33.0
Investment
IPF acquired 18.6% of the newly JSE-listed Investec Australia Property Fund ("IAPF"). IAPF is a trust incorporated in Australia
giving IPF direct access to Australian property and exposure to the Australian dollar representing 4.4% of the Fund's asset
base.
Three of the directors of Investec Property Fund serve on the board of Investec Property Limited, the responsible entity of
IAPF, in their personal capacity and not in their capacity as directors of the Fund.
The investment is classified as having level 1 inputs in terms of IFRS13; valued by reference to the quoted market price
for IAPF.
Fair value adjustments of investment property
The Fund's policy is to value investment properties at year-end, with independent valuations performed on a rotational basis
to ensure each property is valued at least every 3 years by an independent external valuer. The directors value properties
by applying the income capitalisation method. Total revaluations for the current year amounted to R186.9mn, an increase of
3.4% on carrying value.
Fair value adjustments 31 March 31 March
2014 2013
(R'mn) (R'mn)
Fair value adjustment on interest rate swap 9.0 (4.1)
Debenture fair value adjustment (29.7) (197.0)
Net investment property revaluation 186.9 118.2
IAPF revaluation 45.4 _
211.6 (82.9)
Fair value hierarchy
Carried at fair Carried at
Financial instrument (R'000) value Level 1 Level 2 Level 3 amortised cost
Derivative assets – 3 714 – 3 714 – –
Interest rate swap
Derivative assets –
276 – 276 – –
Forward exchange contract
Investments held –
288 696 288 696 – – –
Listed Investment in IAPF
292 686 288 696 3 990 – –
Cash and cash equivalents – – – – 358 316
Long-term borrowings – – – – 944 864
Trade and other payables – – – – 415 771
Trade and other receivables – – – – 77 766
Total 292 686 288 696 3 990 – 1 796 717
Valuation techniques Interest rate swaps are valued with reference to the prevailing interest rate and the
Interest rate swaps specifics of the contract
Forward exchange contracts Forward exchange contracts are valued with reference to the prevailing exchange rate at
balance sheet date and the specific rate entered into in terms of the contract.
Investment in IAPF The investment is valued with reference to quoted (unadjusted) market prices for IAPF.
Line items at amortised cost For all items carried at amortised cost, their current carrying values reasonably
approximate their fair values and further fair value disclosure is not required in accordance
with IFRS 7.29
There have been no transfers between levels of hierachy or policy.
Capital funding
The Fund's Balance Sheet remains well positioned for growth. It is able to absorb interest rate volatility with gearing at
16.8%, a long-dated debt and swap maturity profile (2.8 years and 4.0 years, respectively) and a current hedged position
of 110% after taking advantage of and locking in lower forward rates during the year. This will reduce to 84% after the
completion of R300mn of announced acquisitions. The Fund continues to ensure a diversity of funding sources to minimise
liquidity risk and maximise pricing efficiency with access to bank debt, medium-term bond and short-term bond markets.
31 March
2014 Pro forma*
Hedge position 110% 84%
Average swap rate 7.4% 7.4%
Average swap expiry 4 years 4 years
All-in funding cost 9.2% 8.5%
Average debt expiry 2.8 years 3.0 years
*Post commercial paper issue and announced acquisitions
At year end, the Fund's all-in cost of borrowing was 9.2%, distorted by short-term facilities used to bridge acquisitions made
in March 2014 and still in place at year-end. Funding costs will therefore reduce and normalise to 8.5% post the refinancing
of the bridge facility in the commercial paper market on 15 April 2014 and payment for R300mn of announced acquisitions.
We have the ability to minimise the impact of the outward shift in long-term rates, given our current hedged position, but do
expect total borrowing costs to move upwards as and when larger acquisitions are made.
At 31 March 2014 – R'mn Expiry Rate Facility Utilised Available
Facilities available
Investec bridge facility1 30 April 2015 JIBAR + 225 bp 500 80 420
Standard Bank term debt facility² October 2016 JIBAR + 155 bp 250 250 –
Nedbank term debt facility² October 2018 JIBAR + 170 bp 250 250 –
DMTN Programme n/a various 3 000 450 2 550
4 000 1 030 2 970
1 Post year-end this was refinanced with DMTN commercial paper at a margin of 27 bps above 3-month JIBAR. Additionally,
R96mn of the facility has been encumbered to provide guarantees for Nicol Main Buildings D and E.
2 Nedbank and Standard Bank facilities were concluded on 3 October 2013 and each include a R50mn revolving credit facility.
Debtor arrears
Receivables have been tightly managed during the year and at year-end gross arrears were R1.7mn, representing 0.3% of
total collectables over the period (31 March 2013: 0.6%).
Share capital
On 16 August 2013, shareholders approved the conversion of the Fund's linked-unit structure to that of an all-equity capital
structure. To achieve this, each linked unit was replaced with a delinked ordinary share with the fair value of debentures
capitalised to stated capital and the Fund's ordinary par value shares converted to ordinary no par value shares.
The Fund has authorised share capital of one billion no par value shares at 31 March 2014.
During the year the Fund issued 41 011 620 shares as part of an accelerated book build, raising R594mn net of transaction
costs, but inclusive of R29.3mn antecedent dividends.
REIT legislation
On 1 April 2013, National Treasury introduced South African REIT regulations. The Fund applied to and received from
the JSE, REIT status with effect from 1 April 2013, being the first day of the current financial year ending 31 March 2014.
The capital structure of the Fund was converted as set out above.
Sustainability
IPF acknowledges its responsibility to its stakeholders, the environment and the community at large and consistently focuses
on continual improvement of our business and environmental sustainability. During the year, the Fund expanded the energy
efficiency programme launched during 2012, with the introduction of unique operating methods and deployment of capital in
areas that have proven to deliver superior returns for both the Fund and tenants.
Related party transactions
The Fund entered into the following significant related party transactions during the year with Investec Limited and its subsidiaries:
Related party transactions R'mn
Investec Bank Limited
Corporate advisory and structuring fees 11.8
Bridge facility – carrying value 80.0
Interest rate swaps carrying value 3.7
Rentals received 41.3
Interest received 10.6
Investec Property (Pty) Ltd
Rental guarantees received 9.1
Capex projects 16.3
Asset management fee 26.4
Acquisitions from Investec Property (Pty) Ltd
Bigen 125.1
Big Box retail portfolio 208.6
Martin & Martin 88.6
5 Bond Street 118.5
SA Ladder 75.1
Shareholders
Number of shares in issue at 31 March 2014 358 231 620
Shares to be issued – RPP transaction 7 345 043
Number of shares in issue post RPP transaction 365 576 663
Changes to the Board
Effective 1 April 2014, Sam Hackner assumed the role of non-executive chairman of Investec Property (Pty) Ltd, the Manager
of IPF. As a result, Sam's designation changed from executive chairman to non-executive chairman of the Fund, effective the
same date.
Distribution reinvestment plan
The board has decided to provide Investec Property Fund shareholders with the election to re-invest their cash dividend in
return for shares. This election provides the Fund with additional capital to support future acquisitions and growth, whilst at
the same time providing shareholders the opportunity to acquire shares in the Fund at a reduced cost compared to the cost
of acquiring shares in the market.
Prospects
The current IPF property and investment portfolio of R6.1bn represents a diversified base of quality properties. The portfolio's
income stream is underpinned by strong tenant covenants with 46% single tenant triple net leases, a WALE of 4.3 years, low
vacancies of 2.6% and in force escalations of 8.1% which are comfortably market related. Despite the uncertain economic
outlook, highly competitive property landscape and upward pressure on administration, operation and funding costs, with the
strength of the core portfolio and efficiently capitalised and hedged balance sheet IPF is well positioned to continue to deliver
on its objective of investing in quality income producing properties and delivering long-term distribution and capital growth.
The Board envisages growth for the forthcoming year substantially in line with historical growth.
This forecast is based on the assumptions that the macro-economic environment will not deteriorate markedly, no major
corporate failures will occur, budgeted renewals will be concluded, that clients will be able to absorb the recovery of rising
rates and utility costs and that the ZAR/AUD exchange rate remains at similar levels to the last financial year. Budgeted rental
income was based on contractual escalations and market-related renewals.
The information and opinions contained above are recorded and expressed in good faith and are based upon sources
believed to be reliable. No representation, warranty, undertaking or guarantee of whatever nature is made or given with
regards to the accuracy and/or completeness of such information and/or the correctness of such opinions.
This forecast has not been reviewed or audited by the Fund's independent external auditors.
On behalf of the Board of Investec Property Fund Limited
Sam Hackner Sam Leon
Chairman Chief Executive Officer
22 May 2014
Basis of accounting
The reviewed preliminary condensed financial information for the year ended 31 March 2014 has been prepared in
accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), the
presentation and disclosure requirements of IAS 34: Interim Financial Reporting, the SAICA Financial Reporting Guide
as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council and the Companies Act, 71 of 2008.
The accounting policies applied in the preparation of the results for the year ended 31 March 2014 are consistent with
those adopted in the financial statements for the year ended 31 March 2013. However, a new standard, IFRS13 has been
implemented which addresses fair value. The new standard affects the disclosure of fair value. These reviewed preliminary
condensed financial statements have been prepared under the supervision of Dave Donald, CA(SA).
Review conclusion
Ernst & Young Inc., the Fund's independent auditors, have reviewed the preliminary condensed financial results and have
expressed an unmodified review conclusion on the preliminary condensed financial results, which is available for inspection
at the company's registered office.
Final dividend with the election to reinvest cash dividend for shares
Notice is hereby given of the declaration of final dividend number 6 ("Cash dividend") of 57.744 cents per share for the
period 1 October 2013 to 31 March 2014.
Shareholders will be entitled to elect to reinvest the Cash Dividend of 57.744 cents per share, after deduction of the
applicable dividend tax, in return for shares ("Share Alternative"), failing which they will receive the net Cash Dividend in
respect of all or part of their shareholdings.
Shareholders who have dematerialised their shares are required to notify their duly appointed Central Securities Depository
Participant ("CSDP") or broker of their election in the manner and time stipulated in the custody agreement governing the
relationship between the shareholder and their CSDP or broker.
Other information:
- The dividend portion has been declared from income reserves and no secondary tax on companies' credit has been used.
- A dividend withholding tax of 15% will be applicable on the dividend portion to all shareholders who are not exempt.
- The issued share capital at the declaration date is 358 321 620 ordinary shares of no par value.
In accordance with Investec Property Fund's status as a REIT with effect from 1 April 2013, shareholders are advised that
the dividend meets the requirements of a ‘qualifying distribution' for the purposes of section 25BB of the Income Tax Act,
No. 58 of 1962 (Income Tax Act). The dividends on the shares will be deemed to be dividends for South African tax
purposes in terms of section 25BB of the Income Tax Act.
Tax implications for South African resident shareholders:
Dividends received by or accrued to South African tax residents must be included in the gross income of such shareholders
and will not be exempt from the income tax in terms of the exclusion to the general dividend exemption contained in
section 10(1)(k)(i)(aa) of the Income Tax Act because they are dividends distributed by a REIT. These dividends are however
exempt from dividend withholding tax (Dividend Tax) in the hands of South African resident shareholders, provided that the
South African resident shareholders have provided to their CSDP or broker, as the case may be, in respect of uncertificated
shares, or the Fund, in respect of certificated shares, a DTD(EX) (Dividend Tax: Declaration and undertaking to be made by
the beneficial owner of a share) form to prove their status as South African residents.
If resident shareholders have not submitted the abovementioned documentation to confirm their status as South African
residents, they are advised to contact their CSDP, or broker, as the case may be, to arrange for the documents to be
submitted prior to the payment of the dividend.
Tax implications for non-resident shareholders:
Dividends received by non-resident shareholders from a REIT will not be taxable as income and instead will be treated as
ordinary dividends which are exempt from income tax in terms of the general dividend exemption section 10(1)(k) of the
Income Tax Act. It should be noted that up to 31 December 2013 dividends received by non-residents from a REIT were
not subject to Dividend Tax. With effect from 1 January 2014, any dividend received by a non-resident from a REIT will be
subject to Dividend Tax at 15%, unless the rate is reduced in terms of any applicable agreement for the avoidance of double
taxation (DTA) between South Africa and the country of residence of the non-resident shareholder. Assuming Dividend Tax
will be withheld at a rate of 15%, the net amount due to non-resident shareholders is 49,0824 cents per share. A reduced
dividend withholding rate in terms of the applicable DTA may only be relied on if the non-resident shareholder has provided
the following forms to their CSDP or broker, as the case may be, in respect of uncertificated shares, or the Fund, in respect
of certificated shares:
- A declaration that the dividend is subject to a reduced rate as a result of the application of the DTA.
- A written undertaking to inform the CSDP, or broker or the company, as the case may be, should the circumstances
affecting the reduced rate change or the beneficial owner cease to be the beneficial owner, both in the form prescribed
by the Commissioner of the South African Revenue Services.
If applicable, non-resident shareholders are advised to contact the CSDP, broker or the Fund, as the case may be, to
arrange for the abovementioned documents to be submitted prior to payment of the dividend if such documents have not
already been submitted.
Summary of the salient dates relating to the Cash Dividend and Share Alternative are as follows:
2014
Circular and form of election posted to shareholders Thursday, 22 May
Announcement of Share Alternative issue price and finalisation information Thursday, 29 May
Last day to trade ("LDT") cum dividend Friday, 6 June
Shares to trade ex dividend Monday, 9 June
Listing of maximum possible number of Share Alternative Shares commences on the JSE Wednesday, 11 June
Last day to elect to receive the Share Alternative (no late forms of election will be accepted)
at 12:00 (South African time) Friday, 13 June
Record date Friday, 13 June
Announcement of results of Cash Dividend and Share Alternative on SENS Tuesday, 17 June
Cheques posted to Certificated Shareholders and accounts credited by CSDP or broker to
Dematerialised Shareholders electing the Cash Dividend on or about Tuesday, 17 June
Announcement of results of Cash Dividend and Share Alternative in the press Wednesday, 18 June
Share certificates posted to Certificated Shareholders and accounts credited by CSDP or broker to
Dematerialised Shareholders electing the Share Alternative on or about Thursday, 19 June
Adjustment to Shares listed on or about Thursday, 19 June
Notes:
1. Shareholders electing the Share Alternative are requested to note that the new shares will be listed on LDT + 3 and these new
shares can only be traded on LDT + 3 as the settlement of the shares will occur three days after record date, which differs from the
conventional one day after record date settlement process.
2. Shares may not be dematerialised or rematerialised between commencement of trade on Monday, 9 June 2014 and close of trade on
Friday, 13 June 2014.
3. The above dates and times are subject to change. Any changes will be released on SENS and published in the press.
The Cash Dividend or Share Alternative may have tax implications for resident and non-resident shareholders. Shareholders
are therefore encouraged to consult their professional advisors should they be in any doubt as to the appropriate action to
take.
By order of the Board
Investec Bank Limited
Company Secretary
22 May 2014
Company Information
Directors
S Hackner (Chairman)#
SR Leon (Chief Executive Officer)
MP Crawford (Lead Independent Director)#*
DAJ Donald
LLM Giuricich#
S Mahomed#*
CN Mashaba#*
MM Ngoasheng#*
GR Rosenthal#*
#
Non-executive
* Independent
Investec Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2008/011366/06)
Share code: IPF ISIN: ZAE000180915
(Income tax reference number 9332/719/16/1)
Registered office
C/o Company Secretarial, Investec Limited
100 Grayston Drive, Sandown, Sandton, 2196
Transfer secretary
Computershare Investor Services Proprietary Limited
(Registration number 2004/003647/07)
Ground Floor, 70 Marshall Street, Johannesburg, 2001
Sponsor
Investec Bank Limited
100 Grayston Drive, Sandown, Sandton, 2196
Date: 22/05/2014 07:56:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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