Sectors Shares

SYCOM PROPERTY FUND - Provisional Financial Results, Distribution Finalisation announcement and update on Acucap Restructure and Offer

Release Date: 12/06/2014 17:14
Code(s): SYC SYCR
 
Wrap Text
Provisional Financial Results, Distribution Finalisation announcement and update on Acucap Restructure and Offer

Sycom Property 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
Share code: SYC      ISIN: ZAE000019303
Sycom receipts: SYCR ISIN: ZAE000189551
Approved as a REIT by the JSE

AUDITED PROVISIONAL FINANCIAL RESULTS, FINALISATION ANNOUNCEMENT IN RESPECT OF THE FINAL DISTRIBUTION 
FOR THE YEAR ENDED 31 MARCH 2014 AND UPDATE ON TIMING OF ACUCAP RESTRUCTURE AND SYCOM OFFER

The directors of Sycom Property Fund Managers Limited, the management company of Sycom
Property Fund (Sycom or the Fund), submit their report on the audited summary consolidated
results of Sycom for the year ended 31 March 2014.

SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                 Audited at    Audited at   
                                                31 Mar 2014   31 Mar 2013   
                                                    (R'000)       (R'000)   
ASSETS                                                                      

Property assets                                   8 196 492     8 378 608   
Investment properties and related receivables     7 528 383     8 378 608   
Investment properties                             7 307 028     8 120 486   
Non-current straight-lining lease receivable        182 052       232 662   
Current straight-lining lease receivable             39 303        25 460   
Investment properties held for sale and                                     
related receivables                                 668 109             -   
Investment properties held for sale                 659 244             -   
Straight-lining lease receivable                      8 865             -   
     
Other non-current assets                            461 121       310 722   
Listed investment                                   409 224       310 722   
Derivative financial instruments                     51 897             -   
     
Current assets                                      393 807       298 019   
Rental and other receivables                         80 185        82 894   
Cash and cash equivalents                           303 304       206 745   
Dividends receivable                                 10 318         8 380   
     
Total assets                                      9 051 420     8 987 349   
     
UNITHOLDERS' FUNDS AND LIABILITIES                                          
     
Unitholders' funds                                5 776 880     6 707 343   
Unitholders' capital                              1 947 048     2 579 048   
Non-distributable reserves                        3 829 832     4 128 295   
     
Non-current liabilities                           2 903 795     1 933 545   
Borrowings                                        2 903 795     1 900 808   
Derivative financial instruments                          -        32 737   
     
Current liabilities                                 370 745       346 461   
Trade and other payables                            125 652       111 409   
Derivative financial instruments                     54 643         9 820   
Unitholders for distribution                        190 450       225 232

Total equity and liabilities                      9 051 420     8 987 349

Net asset value per unit - cents                      2 887         2 698   


SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS                                                                    
                                                                 Audited at    Audited at   
                                                                31 Mar 2014   31 Mar 2013   
                                                                    (R'000)       (R'000)   
Cash utilised in operating activities                                                       
Cash generated from operations                                      532 933       296 620   
Dividend received                                                       833         7 654   
Distributions paid                                                (503 315)     (422 730)   
Interest paid                                                     (151 928)      (82 399)   
Interest received                                                    42 236        36 825   
Taxation paid                                                         (556)             -   
Net cash utilised in operating activities                          (79 797)     (164 030)   

Cash flows utilised in investing activities                                                 
Subsequent expenditure on investment properties                    (23 801)      (34 339)   
Subsequent expenditure on investment properties held for sale       (7 918)             -   
Acquisition of investment properties                            (1 679 596)   (1 479 522)   
Selling costs on disposal of investment properties*                 (3 403)             -   
Subscription to rights issue                                              -      (64 967)   
Net cash outflow from investing activities                      (1 714 718)   (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)             -   
Share buyback costs                                                 (1 434)             -   
Borrowings raised                                                 1 002 987     1 067 342   
Net cash inflow from financing activities                         1 890 436     1 067 342

Net increase/(decrease) in cash and cash equivalents                 95 921     (675 516)   
Cash and cash equivalents at the beginning of the year              206 745       882 055   
Effect of exchange rate fluctuations on cash held                       638           206   
Cash and cash equivalents at end of the year                        303 304       206 745   


* Somerset Mall was sold to Hyprop on 1 October 2013. No cash proceeds were received on the disposal
as Hyprop settled the purchase price through the tender of 81.5 million units held in Sycom. These units
have been cancelled and their listing terminated.

SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN UNITHOLDERS FUNDS

                                                                            AUDITED   
                                                                       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, recorded directly
in equity                                                 -               -               -               -     
Total comprehensive income for the year                   -               -       1 180 277       1 180 277
Transfer to non-distributable reserve                     -         745 148       (745 148)               -
Unitholders distribution                                  -               -       (435 129)       (435 129)

Balance at 31 March 2013                          2 579 048       4 128 295               -       6 707 343

Transactions with owners, recorded 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                -

Buyback of 81.5 million units in October 2013   (1 481 468)       (819 966)              -      (2 301 434)
Reduction in equity as a result of buyback      (1 480 034)       (819 966)              -      (2 300 000)
Incremental costs attributable to buyback of
unitholder capital                                  (1 434)               -              -          (1 434)

Total comprehensive income for the year
Profit for the year                                      -                -        898 724          898 724
                                                                                         
Other comprehensive income for the year                  -           51 897              -           51 897
                                        
Net change in fair value of cash flow hedge
recognised directly in other comprehensive
income                                                   -           51 897              -           51 897


Total comprehensive income for the year                  -           51 897        898 724          950 621
  
Transfer to non-distributable reserve                    -          469 606      (469 606)                -

Unitholders' distribution                                -                -      (438 610)        (438 610)
Balance at 31 March 2014                         1 947 048        3 829 832              -        5 776 880


                                                                      Audited twelve   Audited twelve
                                                                           months to        months to 
                                                                         31 Mar 2014      31 Mar 2013  
                                                                             (R'000)          (R'000)   
SUMMARISED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER                                                      
COMPREHENSIVE INCOME                                                                                    

Revenue                                                                      685 699          651 352   
Contractual rental revenue and recoveries                                    701 389          621 425   
Straight-lining of rental revenue adjustment                                (15 690)           29 927   

Direct property operating expenses                                         (133 589)        (109 791)   

Loss on disposal of investment property                                     (19 431)                -   
Selling costs on investment properties held for sale                           (553)                -   
Dividend from listed investment                                               19 973           15 961   

Fair value changes on investment property and listed investment              517 922          721 507   
Fair value gain on investment properties                                     436 400          719 667   
Fair value gain on listed investment                                          81 522            1 840   

Administrative expenses                                                     (42 131)         (38 429)   
Service charge                                                              (39 067)         (37 178)   
Other administrative expenses                                                (3 064)          (1 251)   

Profit before net finance costs                                            1 027 890        1 240 600   

Net finance costs                                                          (128 610)         (60 227)   
Interest income                                                               43 561           37 500   
Interest expense                                                           (160 085)         (91 537)   
Net change in fair value of derivative financial 
instruments at fair value through profit and loss                           (12 086)          (6 190)   

Profit before taxation                                                       899 280        1 180 373   

Taxation                                                                       (556)             (96)   

Profit for the year                                                          898 724        1 180 277   

Other comprehensive income for the year                                                     
Net change in fair value of cash flow hedges                                  51 897                -   
Other comprehensive income for the year                                       51 897                -   

Total comprehensive income for the year                                      950 621        1 180 277   

Number of units in issue ('000)                                              200 132          248 604   
Weighted number of units ('000)                                              237 531          248 604   

Earnings per unit - cents                                                     378.36           474.76   

RECONCILIATION OF EARNINGS TO HEADLINE EARNINGS AND                                                     
DISTRIBUTABLE EARNINGS                                                                                  

Profit for the period                                                        898 724        1 180 277   

Fair value adjustment to investment properties, net of deferred tax        (436 400)        (719 571)   
Loss on disposal of investment property                                       19 431                -   
Secondary tax on companies                                                       556                -   

Headline earnings                                                            482 311          460 706   

Selling costs on investment properties held for sale                             553                -   
Straight-lining rental income accrual                                         15 690         (29 927)   
Unrealised deficit on derivative financial instruments                        12 086            6 190   
Fair value adjustment to listed investment                                  (81 522)          (1 840)   
Prepaid distribution                                                           9 492                -   

Distributable earnings                                                       438 610          435 129   

Annual earnings per unit:                                                                               
Basic earnings* per unit- cents                                               378.36           474.76   
Headline earnings* per unit - cents                                           203.05           185.32   
Annual distribution per unit - cents                                          183.28           175.03   

Interim distribution - cents                                                   88.12            84.43   
Final distribution - cents                                                     95.16            90.60   

*Sycom does not have any dilutionary instruments in issue.                                                                             


SUMMARISED CONSOLIDATED SEGMENTAL RESULTS

Segmental information is based on the nature of the business activities for which the properties are used. 
While investment properties are managed on an individual basis, the group comprises the following main 
reportable industry recognised operating segments:

Segmental earnings:                                                                      
Year ended 31 March 2014                                                                 
                                                                   Audited               
                                                         RETAIL    OFFICES       TOTAL   
                                                        (R'000)    (R'000)     (R'000)   
Segment rental revenue and recoveries                   297 783    403 606     701 389   
Straight-line rental income accrual                         888   (16 578)    (15 690)   
Dividend income                                          19 973          -      19 973   
Total revenue                                           318 644    387 028     705 672   
Operating expenditure                                  (56 350)   (77 239)   (133 589)   
Loss on disposal of investment property                (19 431)          -    (19 431)   
Selling costs on investment properties held for sale      (362)      (191)       (553)   
Net finance cost                                          2 461      1 683       4 144   
Segmental net operating income                          244 962    311 281     556 243   

Fair value adjustments                                  274 155    243 767     517 922   
South Africa                                            192 633    243 767     436 400   
International                                            81 522          -      81 522   
Segmental earnings                                      519 117    555 048   1 074 165   


Reconciliation of segmental results to profit for the year in the statement of profit or loss and other comprehensive income:

                                                            Allocated   Unallocated       Total   
Rental revenue and recoveries                                 701 389             -     701 389   
Straight-line rental income accrual                          (15 690)             -    (15 690)   
Dividend income                                                19 973             -      19 973   
Total revenue                                                 705 672             -     705 672   
Operating expenditure                                       (133 589)      (42 131)   (175 720)   
Loss on disposal of investment property                      (19 431)             -    (19 431)   
Selling costs on investment properties held for sale            (553)             -       (553)   
Net finance cost                                                4 144     (120 668)   (116 524)   
Net operating income                                          556 243     (162 799)     393 444   
Fair value gain on investment properties                      436 400             -     436 400   
Fair value gain on listed investment                           81 522             -      81 522   
Fair value adjustment on interest rate and cross currency                                         
swaps                                                               -      (12 086)    (12 086)   
Profit before taxation                                      1 074 165     (174 885)     899 280   
Taxation                                                            -         (556)       (556)   
Profit for the year                                         1 074 165     (175 441)     898 724   

Segmental earnings:                                                       
Year ended 31 March 2013                                                  
                                                    Audited               
                                          RETAIL    OFFICES       TOTAL   
                                         (R'000)    (R'000)     (R'000)   
Segment rental revenue and recoveries    343 670    277 755     621 425   
Straight-line rental income accrual        6 605     23 322      29 927   
Dividend income                           15 961          -      15 961   
Total revenue                            366 236    301 077     667 313   
Operating expenditure                   (55 191)   (54 600)   (109 791)   
Net finance cost                           2 025      1 024       3 049   
Segmental net operating income           313 070    247 501     560 571   

Fair value adjustments                   597 613    123 894     721 507   
South Africa                             595 773    123 894     719 667   
International                              1 840          -       1 840   
Taxation                                       -       (96)        (96)   
Segmental earnings                       910 683    371 299   1 281 982   


Reconciliation of segmental results to profit for the year in the statement of profit or loss and other comprehensive income:

                                                            Allocated   Unallocated       Total   
Rental revenue and recoveries                                 621 425             -     621 425   
Straight-line rental income accrual                            29 927             -      29 927   
Dividend income                                                15 961             -      15 961   
Total revenue                                                 667 313             -     667 313   
Operating expenditure                                       (109 791)      (38 429)   (148 220)   
Net finance cost                                                3 049      (57 086)    (54 037)   
Net operating income                                          560 571      (95 515)     465 056   
Fair value gain on investment properties                      719 667             -     719 667   
Fair value gain on listed investment                            1 840             -       1 840   
Fair value adjustment on interest rate and cross currency                                         
swaps                                                               -       (6 190)     (6 190)   
Profit before taxation                                      1 282 078     (101 705)   1 180 373   
Taxation                                                         (96)             -        (96)   
Profit for the year                                         1 281 982     (101 705)   1 180 277   


Segmental assets, liabilities and reserves                                                                        
Year ended 31 March 2014                                                                                          
                                                                                          Audited                 
                                                                             RETAIL       OFFICES         TOTAL   
                                                                            (R'000)       (R'000)       (R'000)   
Segmental assets                                                                                                  
Property assets                                                           3 633 092     4 563 400     8 196 492   
Listed investment                                                           409 224             -       409 224   
Current assets                                                               49 834        76 975       126 809   
                                                                          4 092 150     4 640 375     8 732 525   
Segmental liabilities                                                                                             

Current liabilities                                                        (37 592)      (55 454)      (93 046)   

Net segmental assets                                                      4 054 558     4 584 921     8 639 479   

Reconciliation of segmental results to statement of financial position:                                           
                                                                          Allocated   Unallocated         Total   
Assets                                                                                                            
Property assets                                                           8 196 492             -     8 196 492   
Listed investment                                                           409 224             -       409 224   
Derivative financial instruments                                                  -        51 897        51 897   
Current assets                                                              126 809       266 998       393 807   
Total assets                                                              8 732 525       318 895     9 051 420   
Liabilities                                                                                                       
Borrowings                                                                        -   (2 903 795)   (2 903 795)   
Derivative financial instruments                                                  -      (54 643)      (54 643)   
Unitholders for distribution                                                      -     (190 450)     (190 450)   
Trade and other payables                                                   (93 046)      (32 606)     (125 652)   
Total liabilities                                                          (93 046)   (3 181 494)   (3 274 540)   
Net assets                                                                8 639 479   (2 862 599)     5 776 880   


Segmental assets, liabilities and reserves                                                                        
Year ended 31 March 2013                                                                                          
                                                                                          Audited                 
                                                                             RETAIL       OFFICES         TOTAL   
                                                                            (R'000)       (R'000)       (R'000)   
Segmental assets                                                                                                  
Property assets                                                           4 055 608     4 323 000     8 378 608   
Listed investment                                                           310 722             -       310 722   
Current assets                                                               56 607        69 528       126 135   
                                                                          4 422 937     4 392 528     8 815 465   
Segmental liabilities                                                                                             
Current liabilities                                                        (34 855)      (42 133)      (76 988)   

Net segmental assets                                                      4 388 082     4 350 395     8 738 477   

Reconciliation of segmental results to statement of financial position:                                           
                                                                          Allocated   Unallocated         Total   
Assets                                                                                                            
Property assets                                                           8 378 608             -     8 378 608   
Listed investment                                                           310 722             -       310 722   
Current assets                                                              126 135       171 884       298 019   
Total assets                                                              8 815 465       171 884     8 987 349   
Liabilities                                                                                                       
Borrowings                                                                        -   (1 900 808)   (1 900 808)   
Derivative financial instruments                                                  -      (42 557)      (42 557)   
Unitholders for distribution                                                      -     (225 232)     (225 232)   
Trade and other payables                                                   (76 988)      (34 421)     (111 409)   
Total liabilities                                                          (76 988)   (2 203 018)   (2 280 006)   
Net assets                                                                8 738 477   (2 031 134)     6 707 343   


BASIS OF PREPARATION AND AUDIT OPINION

The audited summary consolidated financial statements are prepared in accordance with the
requirements of the JSE Limited Listings Requirements for provisional reports, and the
requirements of the Collective Investments Schemes Control Act, 2002, applicable to summary
financial statements. The Listings Requirements require provisional reports to be prepared in
accordance with the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee and Financial Pronouncements as issued by the
Financial Reporting Standards Council and to also, as a minimum, contain the information
required by IAS 34 Interim Financial Reporting. The accounting policies applied in the preparation
of the audited consolidated financial statements, from which the audited summary consolidated
financial statements were derived, are in terms of International Financial Reporting Standards.

The audited consolidated financial statements are prepared on the historical cost basis, except
for investment properties, investment properties held for sale, derivative financial instruments,
and financial assets carried at fair value through profit or loss which are measured at fair value.
The audited consolidated financial statements are prepared on the going-concern basis. Sycom
has adopted the following new standards and amendments to standards, with an initial
application date of 1 April 2013: IFRS 10 Consolidated Financial Statements, IFRS 11 Joint
Arrangements, IFRS 12 Disclosure of Interests in Other Entities, IFRS 13 Fair Value Measurement.

These audited summary consolidated financial statements for the year ended 31 March 2014
have been audited by KPMG Inc., who expressed an unmodified opinion thereon. The auditor
also expressed an unmodified opinion on the audited consolidated financial statements from
which these audited summary consolidated financial statements were derived.

A copy of the auditor’s report on the audited summary consolidated financial statements and of
the auditor’s report on the audited consolidated financial statements are available for inspection
at the company’s registered office, together with the audited consolidated financial statements
identified in the respective auditor’s reports.

The information contained in the commentary below does not form part of the audit opinion. The
auditor’s report does not necessarily report on all of the information contained in this
announcement/financial results. Shareholders are therefore advised that in order to obtain a full
understanding of the nature of the auditor’s engagement they should obtain a copy of the
auditor’s report together with the accompanying financial information from the issuer’s
registered office.

The preparation of the consolidated year-end results for the year ended 31 March 2014 and this
summarised report were supervised by the Financial Director, Mr CB Marlow, CA (SA).

COMMENTARY

1.   REVIEW OF RESULTS AND OPERATIONS                                                                                                                                           
     The board of Sycom Property Fund Managers Limited is pleased to report a distribution of 95.16 cents per 
     unit (cpu) for the six months ended 31 March 2014. Together with the interim distribution of 88.12 cpu, 
     this gives unitholders an annual distribution of 183.28 cpu, an increase of 4.7% over the 2013 financial year. 
                                                                                                             
2.   CORPORATE ACTION                                                                                                                                                        
     Merger with Acucap Properties Limited (‘Acucap’)  
                                                                                                                         
     On 31 March 2014, Acucap launched a general offer to holders of Sycom units to swap                                                                                        
     these for shares in Acucap on a ratio of 0.58 Acucap shares for every Sycom unit held. The                                                                                 
     offer closed on 16 May 2014, and the acceptance rate was approximately 95%, excluding                                                                                      
     the effects of the Growthpoint position referred to below. The board considers this a                                                                                      
     successful and highly satisfactory outcome.  
                                                                                                                              
     Acquisition by Growthpoint Properties Limited (‘Growthpoint’) 
                                                                                                             
     Between 10 and 11 April 2014, Growthpoint acquired approximately 31% of the issued units in Sycom, 
     settling the purchase consideration by issuing 1.102 Growthpoint shares for every Sycom unit acquired. 
     Although publicly supportive of the merger between Acucap and Sycom, for regulatory reasons, Growthpoint 
     could not swap all of its Sycom units for Acucap units under the terms of the offer referred to above, 
     and is accordingly left holding approximately 23% of Sycom’s issued units. Growthpoint has also acquired 
     a material interest in Acucap.

3.   PORTFOLIO INVESTMENT ACTIVITY  
                                                                                                                                            
     Vaal Mall                                                                                                                                                                  
     The expansion is set to commence in September 2014, following delays in obtaining                                                                                          
     necessary approvals, some of which may affect the final sizing of the project. The delays are                                                                              
     not expected to impact the forecast return on the development. 
                                                                                                            
     Paarl Mall
     A 2 850m2 expansion of Paarl Mall has been approved, driven largely by a 1 900m2                                                                               
     expansion of Woolworths. The total capital commitment is in the order of R68 m with an                                                                                      
     anticipated first year return of 8%.   
                                                                                                                                    
     Greenacres                                                                                                                                                                 
     Phase 1 of the redevelopment of Greenacres has been approved and is expected to
     commence in August 2014. This phase comprises the construction of 3 340m2 of retail area   
     in a new link mall on the southern side of Greenacres, which will join the current                                                                                         
     Woolworths with the Shoprite Hyper entrance. The total capital commitment for this phase                                                                                   
     is in the order of R86 m (Sycom share R43 m) with an anticipated first year return of 13,9%.                                                                                 
     Once completed, this phase will reflect the modern and contemporary standard to which                                                                                      
     the rest of the mall will be upgraded when the second and third phases are completed. The                                                                                  
     total capital commitment for the Greenacres project, including all non-income producing                                                                                    
     refurbishment work and mall revitalisation, is in the order of R280 m (Sycom share                                                                                          
     R140 m) with an anticipated yield of 7,5%, and is expected to be complete by March 2017.  
                                                                                  
     167 on the Square                                                                                                                                                          
     This building is nearing completion, and Sycom expects to take transfer from the developer                                                                                 
     before the end of August. There has been a steady flow of good quality leasing enquiries,
     although the full rental for the first two years after transfer is covered by a cash underpin
     from the developer.


4.   BORROWINGS
     Sycom has an approved total facility of R2.9 billion. Sycom’s gearing level is presently 33.9%. 
     Taking into account the swaps contracted as per the table below, Sycom’s hedged position 
     at year end was 18% and it will rise to 72% of current borrowings by the time all contracted 
     forward starting swaps become effective. 
     Interest rate hedging
                                      
                   Maturity                  Notional   Effective     Fair value     Fair value  
    Start date         date   Fixed rate       amount        rate    at 31.03.14    at 31.03.13
                                                R'000                      R'000          R'000
     31-Mar-14    31-Mar-17       5.790%      200 000      7.290%          8 128              -
     17-Mar-14    17-Mar-17       5.785%      200 000      7.285%          7 990              -
      9-Apr-14     9-Apr-18       6.095%      100 000      7.595%          5 259              -
     30-Sep-14    29-Sep-17       6.045%      200 000      7.545%          8 852              -
     30-Sep-14    30-Sep-16       7.180%      500 000      8.680%              -              -
     31-Mar-15    29-Mar-18       6.305%      300 000      7.805%         13 402              -
     30-Sep-15    28-Sep-18       7.650%      300 000      9.150%          5 067              -
     31-Mar-16    31-Mar-20       8.150%      100 000      9.650%          1 601              -
     31-Mar-16    31-Mar-21       8.340%      100 000      9.840%          1 598              -
         Total                              2 000 000

5.   LEASE EXPIRIES

     The lease expiry profile by rental income is reflected in the table below. The lease with
     Deloitte at The Woodlands has been extended to 31 March 2020.

                         Total     Retail    Offices
           Mar-15        17.5%       8.5%       9.0%
           Mar-16        15.9%      12.6%       3.3%
           Mar-17        27.2%      12.1%      15.1%
           Mar-18         7.2%       3.4%       3.8%
           Mar-19        12.1%       3.2%       8.9%
           thereafter    20.1%       1.7%      18.4%
                        100.0%      41.5%      58.5%

6.   VACANCIES AND BAD DEBTS

     The table below provides details of Sycom’s vacancies at March 2012, 2013 and 2014,
     expressed by gross lettable area.

     The increase in Retail vacancies is largely attributed to planned vacancies at Vaal Mall to
     accommodate the expansion.

     The increase in Office vacancies is largely as a result of an individual tenant failure at
     Harrowdene Office Park.

                                       Mar-14        Mar-13       Mar-12
             Retail vacancy              3.0%          1.6%         2.4%
             Office vacancy              4.4%          2.7%         3.9%
             Total vacancy               3.8%         2.2 %         3.1%

     The impairment provision at 31 March 2014 amounted to R2.7m compared to R1.28 m at
     31 March 2013. Bad debts written off decreased to R0.7m in the current year from the
     R1.25 m written off in the 2013 year.

7.   EVENTS AFTER THE REPORTING DATE

     Other than the Corporate Action detailed above there have been no significant events after the
     reporting date.

8.   PROSPECTS

     Sycom unitholders exchanging their Sycom units for Acucap units are referred to the offer
     document, dated 31 March 2014 and available on the fund’s website (www.sycom.co.za), and
     the joint announcement released by Acucap and Sycom on SENS on 27 March 2014, for the
     forecast financial information on Sycom and Acucap, post the Acucap Sycom merger ("Forecast
     Financial Information"). The Forecast Financial Information was, at the time, reviewed by KPMG
     Inc.

     The board expects Sycom’s distribution growth to be in line with the Forecast Financial
     Information for the year ending 31 March 2015, that is, between 6% and 7%. This guidance has
     not been reviewed or reported on by Sycom’s auditors.

9.   DISTRIBUTION

     Notice is hereby given of the declaration of distribution number 58 in respect of the six
     months to 31 March 2014. The final distribution of 95.16 (ninety five comma one six)
     cents per unit has been approved in respect of the six-month period ended 31 March
     2014. The last date to trade the units cum distribution is Friday, 20 June 2014 and the
     record date will be Friday, 27 June 2014. The units will start trading ex-distribution from
     Monday, 23 June 2014. Distributions will be made to unitholders on Monday, 30 June
     2014.

     Unit certificates may not be dematerialised or rematerialised between Monday, 23 June
     2014 and Friday, 27 June 2014 both days inclusive.

     Unitholders are referred to the distribution declaration announcement released on SENS on
     5 June 2014 for further information regarding the distribution, including the tax effects.

     From 1 January 2014, any qualifying distribution received by a non-resident from a REIT will be 
     subject to dividend withholding 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 unitholder.  
     
     Assuming dividend withholding tax will be withheld at a rate of 15%, the net amount due to non-resident
     unitholders will be 80.886 cents per unit.  A reduced dividend withholding tax rate in
     terms of the applicable DTA, may only be relied on if the non-resident unitholder has provided 
     the following forms to their CSDP or broker, as the case may be, in respect of the uncertificated units, 
     or the Transfer Secretaries, in respect of certificated units:

     a) a declaration that the dividend is subject to a reduced rate as a result of the application of a DTA; and
     b) a written undertaking to inform their CSDP, broker or the Transfer Secretaries, 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 for the South African Revenue Service.  
     
     Unitholders are referred to the announcement of 5 June 2014 for further information regarding the 
     abovementioned documents.
     
     Local tax resident unitholders as well as non-resident unitholders are encouraged to consult their 
     professional advisors should they be in any doubt as to the appropriate action to take.


UPDATE ON TIMING OF ACUCAP RESTRUCTURE AND SYCOM OFFER 

Sycom unitholders are referred to the announcements released by Acucap Properties Limited ("Acucap") and 
Sycom on 19 May 2014 and 5 June 2014 in terms of which unitholders were advised that the Acucap restructure 
remained subject to the following conditions precedent-

 a)  the new memorandum of incorporation of Acucap being acknowledged by the Companies and Intellectual 
     Property Commission ("CIPC") as having been placed on file; and
 b)  the Takeover Regulation Panel issuing the requisite compliance certificate in respect of the Acucap 
     restructure under section 121 of the Companies Act No 71 of 2008.

Unitholders are hereby advised that the new memorandum of incorporation of Acucap was lodged with the CIPC 
immediately following the Acucap general meeting, however Acucap has, to date, not received the 
acknowledgement of filing from the CIPC. 

Accordingly, the abovementioned conditions precedent to the Acucap restructure have not yet been fulfilled.

A further announcement will be made in due course confirming the revised salient dates and times applicable to 
the Acucap restructure and the Acucap offer to Sycom unitholders, including the record date and pay date.


On behalf of the Board

GK EVERINGHAM                                        PA THEODOSIOU
Chairman                                              CEO
Sycom Property Fund Managers Limited                  Sycom Property Fund Managers Limited

12 June 2014

Registered Office:
Suite A11 Westlake Square
Westlake Drive
Westlake
CAPE TOWN

Transfer secretaries:
Computershare Investor Services Proprietary Limited
70 Marshall Street
JOHANNESBURG

Sponsor:
Questco Proprietary Limited

http://www.sycom.co.za

Directors: GK Everingham (Chairman), MS Moloko (Deputy Chairman), FM Berkeley, JPD Flanagan,
BM Stocks, PA Theodosiou*# (CEO), CB Marlow*, GR Jones*
Company Secretary: HH-O Steyn
* Executive, # British



Date: 12/06/2014 05:14:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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