Wrap Text
Reviewed condensed interim results for the six months ended 30 September 2015
Oasis Crescent Property Fund
A property fund created under the Oasis Crescent Property Trust Scheme
registered in terms of the Collective Investment Schemes Control Act
(Act 45 of 2002) having REIT status with the JSE
Share code: OAS
ISIN: ZAE000074332
(“Oasis” or “the Fund”)
Reviewed condensed interim results for the six months ended 30
September 2015
Condensed statement of comprehensive income
for the 6 months ended 30 September 2015
Reviewed Reviewed Audited
6 months 6 months 12 months
to 30 to 30 to 31
September September March
2015 2014 2015
R’000 R’000 R’000
Revenue 47 023 40 573 84 607
Rental and related income 35 494 31 604 65 668
Income from investments excluding non-
permissible income 10 908 7 249 16 495
Straight-lining of lease income 621 1 720 2 444
Expenses 15 656 14 715 32 851
Property expenses 13 041 12 459 28 165
Service charges 2 121 1 711 3 643
Other operating expenses 494 545 1 043
Net income from rentals and investments 31 367 25 858 51 756
Fair value adjustment to investment
properties excluding straight-lining of
lease income (621) (1 720) 18 189
Fair value adjustment to investment
properties - - 20 633
Straight-lining of lease income (621) (1 720) (2 444)
Operating profit for the period 30 746 24 138 69 945
Net non-permissible investment income (194) 155 (351)
Non-permissible investment income
received 207 155 362
Non-permissible income dispensed (401) - (713)
Net profit for the period 30 552 24 293 69 594
Other comprehensive income
Items that may be classified 26 976 29 665 76 096
subsequently to profit and loss
Fair value gain on available-for-sale
financial assets 27 532 30 684 77 115
Realised gains and losses of financial
assets (556) (1 019) (1 019)
Total comprehensive income for the
period 57 528 53 958 145 690
Basic earnings per unit (cents) 64.5 53.9 152.3
Distribution per unit including non-
permissible income (cents) 61.4 50.2 102.3
Additional information:
Headline earnings and distribution
income reconciliation
Basic earnings before non-permissible
income adjustment 30 746 24 138 69 945
Non-permissible investment income 207 155 362
Basic earnings after non-permissible
income adjustment 30 953 24 293 70 307
Non-permissible income dispensed (401) - (713)
Basic earnings 30 552 24 293 69 594
Adjusted for:
Realised gains on disposal of
available-for-sale investments (556) (1 019) (1 019)
Fair value change to investment
properties 621 1 720 (18 189)
Headline earnings 30 617 24 994 50 386
Less: Fair value adjustments on
financial assets at fair value through
profit or loss
(1 208) (630) (1 581)
Less: Fair value adjustments on tenant
deposits (88) - (337)
Less: Straight-line lease accrual (621) (1 720) (2 444)
Distributable income including non-
permissible income 28 700 22 644 46 024
Non-permissible rental income - (406) -
Non-permissible investment income - (155) -
Distributable income excluding non-
permissible income 28 700 22 083 46 024
Basic earnings per unit (cents) 64.5 53.9 152.3
Headline earnings and diluted headline
earnings per unit (cents) 64.6 55.5 110.3
Distribution per unit including non-
permissible income (cents) 61.4 50.2 102.3
Distribution per unit excluding non-
permissible income (cents) 60.6 49.0 100.7
Weighted average units in issue 47 380 608 45 064 473 45 680 697
Units in issue at the end of the period 47 849 435 45 427 278 46 630 486
Additional information:
Reconciliation of Distributable Income
for the 6 months ended 30 September
2015
Rental income 26 269 23 274 48 810
Rental recoveries 9 672 8 497 17 463
Lease incentives (447) (167) (605)
Rental and related income 35 494 31 604 65 668
Less: Property expenses (13 041) (12 459) (28 165)
Property operating income 22 453 19 145 37 503
Investment income excluding non-
permissible investment income 9 056 5 600 13 557
Fair value adjustment on financial
assets at fair value through profit or
loss 1 296 630 1 919
Realised gain on disposal of available-
for-sale financial assets 556 1 019 1 019
Income from investments excluding non-
permissible income 10 908 7 249 16 495
Non-permissible investment income
received 207 155 362
Total investment income 11 115 7 404 16 857
Net property and investment income 33 568 26 549 54 360
Less: Fair value adjustment on
financial assets at fair value through
profit or loss (1 296) (630) (1 919)
Less: Realised gain on disposal of
available-for-sale financial assets (556) (1 019) (1 019)
Service charges and other operating
expenses (2 615) (2 256) (4 685)
Distributable income including non-
permissible income 29 101 22 644 46 737
Non-permissible rental income (194) (406) (351)
Non-permissible investment income (207) (155) (362)
Distributable income excluding non-
permissible income 28 700 22 083 46 024
Condensed statement of financial position
as at 30 September 2015
Reviewed Reviewed Audited
30 30 31
September September March
2015 2014 2015
R’000 R’000 R’000
Assets
Non-current assets 880 840 769 635 842 520
Investment properties 459 072 431 020 453 843
Property, plant and equipment 411 475 467
Straight-line lease accrual 9 442 7 889 8 212
Available-for-sale financial assets 411 915 330 251 379 998
Current assets 108 564 70 043 88 429
Trade receivables 2 777 5 403 2 211
Trade receivables from related parties 110 1 239 110
Other receivables 5 020 5 923 6 422
Straight-line lease accrual 1 972 2 179 2 580
Financial assets at fair value through
profit or loss 90 195 41 394 53 414
Other short-term financial assets 5 420 9 464 5 194
Cash and cash equivalents 3 070 4 441 18 498
Total assets 989 404 839 678 930 949
Unitholders’ funds and liabilities
Unitholders’ funds 946 579 805 997 894 737
Capital of the Fund 565 579 521 819 542 565
Retained income 7 227 4 445 5 375
Other reserves 373 773 279 733 346 797
Current liabilities 42 825 33 681 36 212
Trade payables 9 236 8 055 7 597
Accruals 206 208 234
Other payables 1 296 1 672 1 601
Trade payables to related parties 771 515 701
Unitholders for distribution 30 047 22 995 25 173
Non-permissible income available for
dispensation 1 269 236 906
Total unitholders’ funds and
liabilities 989 404 839 678 930 949
Supplemental information
NAV (in cents per unit) 1 978 1 774 1 919
Condensed statement of changes in unitholders’ funds
for the 6 months ended 30 September 2015
Capital Non-
of the distributable Retained
Fund reserve income Total
R’000 R’000 R’000 R’000
Balance at 1 April
2014 504 663 250 068 2 438 757 169
Net profit for the
period ended 30
September 2014 - - 24 293 24 293
Other
Comprehensive
Income
Fair value gain on
available-for-sale
financial assets - 30 684 - 30 684
Realised gain on
disposal of
available-for-sale
financial assets - (1 019) - (1 019)
Total
Comprehensive
income for the
period ended 30
September 2014 - 29 665 24 293 53 958
Reinvestment of
distribution 17 403 - - 17 403
Transaction costs
for issue of new
units (69) - - (69)
Distribution
received in
advance (178) - 178 -
Distribution to
unitholders - - (22 261) (22 261)
Dispensation of
non-permissible
income - - (203) (203)
Balance at 30
September 2014 521 819 279 733 4 445 805 997
Net profit for the
period ended 31
March 2015 - - 45 301 45 301
Other
Comprehensive
Income
Fair value gain on
available-for-sale
financial assets - 46 431 - 46 431
Total
Comprehensive
Income for the
period ended 31
March 2015 - 46 431 45 301 91 732
Reinvestment of
distribution 21 348 - - 21 348
Transaction costs
for issue of new
units (104) - - (104)
Transfer from non-
distributable
reserve - 20 633 (20 633) -
Distribution
received in
advance (498) - 498 -
Distribution to
unitholders - - (24 439) (24 439)
Dispensation of
non-permissible
income - - 203 203
Balance at 31 542 565 346 797 5 375 894 737
March 2015
Net profit for the
period ended 30
September 2015 - - 30 552 30 552
Other
Comprehensive
Income
Fair value gain on
available-for-sale
financial assets - 27 532 - 27 532
Realised gain on
disposal of
available-for-sale
financial assets - (556) - (556)
Total
Comprehensive
Income for the
period ended 30
September 2015 - 26 976 30 552 57 528
Reinvestment of
distribution 23 389 - - 23 389
Transaction costs
for issue of new
units (91) - - (91)
Distribution
received in
advance (284) - 284 -
Distribution to
unit holders - - (28 984) (28 984)
Balance at 30
September 2015 565 579 373 773 7 227 946 579
Condensed statement of cash flows
for the 6 months ended 30 September 2015
Reviewed Reviewed Audited
6 months to 6 months to 12 months to
30 September 30 September 31 March
2015 2014 2015
R’000 R’000 R’000
Cash flows from operating
activities
Net profit for the period 30 552 24 293 69 594
Non-permissible investment
income received (207) (155) (362)
Depreciation 55 50 109
Provision for receivables
impairment (754) 3 2 565
Straight-line lease accrual (621) (1 720) (2 444)
Lease incentives 447 167 605
Realised gain on disposal of
available-for-sale financial
assets (556) (1 019) (1 019)
Fair value adjustment on
financial assets at fair
value through profit or loss (1 296) (630) (1 919)
Fair value adjustment to
investment property 621 1 720 (18 189)
Net operating cash flow
before changes in working 28 241 22 709 48 940
capital
Decrease / (Increase)in
current assets
Trade receivables 188 (24) 600
Trade receivables from (937) 192
related parties -
Other receivables 1 401 (129) (628)
Increase/(decrease) in
current liabilities
Trade payables 147 655 197
Accruals (28) (576) (550)
Other payables (306) 146 75
Trade payables to related
parties 70 (79) 107
Cash generated from 29 713 21 765 48 933
operations
Non-permissible investment
income received 207 155 362
Unitholders for distribution (722) (1 272) (2 185)
Non-permissible income
dispensed 363 (334) 559
Net cash inflow from
operating activities 29 561 20 314 47 669
Cash flows from investing
activities
Acquisition of available-for-
sale financial assets (6 362) (24 183) (27 499)
Acquisition of financial
assets at fair value through
profit or loss (35 710) (19 181) (30 248)
Additions to investment
properties (4 805) (5 704) (9 058)
Proceeds from disposal of
financial assets at fair
value through profit or loss - 19 130 30 282
Proceeds from disposal of
available-for-sale financial
assets 1 979 10 643 10 643
Acquisition of other short
term financial assets - (9 464) (16 008)
Acquisition of property,
plant and equipment - (180) (245)
Net cash outflow from
investing activities (44 898) (28 939) (42 133)
Cash flows from financing
activities
Transaction costs on issue of
new units (91) (69) (173)
Net cash outflow from
financing activities (91) (69) (173)
Net (decrease)/increase in
cash and cash equivalents (15 428) (8 694) 5 363
Cash and cash equivalents
At beginning of period 18 498 13 135 13 135
At end of period 3 070 4 441 18 498
Segment information for the 6 months ended 30 September 2015
Indus- Invest- Corpo-
Retail Offices trial ments rate Total
R’000 R’000 R’000 R’000 R’000 R’000
Segment revenue
Property income
Rental income 10 088 4 958 10 776 - - 25 822
Recoveries 6 117 1 687 1 868 - - 9 672
Income from
investments
excluding non-
permissible
income
Dividend income
offshore - - - 4 803 - 4 803
Permissible
investment
income- domestic - - - 4 253 - 4 253
16 205 6 645 12 644 9 056 - 44 550
Segment expense
Property
expenses 9 091 1 994 1 956 - - 13 041
Service charges - - - - 2 121 2 121
Other operating - - - - 494 494
expenses
9 091 1 994 1 956 - 2 615 15 656
Segment result
Operating
profit/(loss) 7 114 4 651 10 688 9 056 (2 615) 28 894
Net finance
income
Interest
received - - - - 207 207
Non-permissible
income dispensed (194) - - - (207) (401)
Net
profit/(loss)
before
straight-line
lease income
and fair value
change to
investment
properties 6 920 4 651 10 688 9 056 (2 615) 28 700
Realised gain on
disposal of
available-for-
sale financial - - - 556 - 556
assets
Straight-lining
of lease income 739 - (118) - 621
Fair value
adjustment to
financial assets
at fair value
through profit
or loss - - - 1 296 - 1 296
Fair value
adjustment to
investment
properties (739) - 118 - - (621)
Net
profit/(loss)
after straight-
line lease
income and fair
value adjustment
to investment
properties 6 920 4 651 10 688 10 908 (2 615) 30 552
Segment assets
Investment
properties 186 503 97 128 175 441 - - 459 072
Property, plant
and equipment 373 38 - - - 411
Straight-line
lease accrual
non-current 4 422 - 5 020 - - 9 442
Straight line
lease accrual
current 423 - 1 549 - - 1 972
Available-for-
sale financial
assets - - - 411 915 - 411 915
Other short term
financial assets 2 677 - 2 743 - - 5 420
Trade
receivables 1 382 675 720 - - 2 777
Trade - - - - 110 110
receivables from
related parties
Other
receivables 325 - 1 764 2 243 688 5 020
Financial assets
at fair value
through profit
or loss - - - 90 195 - 90 195
Cash and cash
equivalents - - - 3 070 - 3 070
196 105 97 841 187 237 507 423 798 989 404
Segment
liabilities
Trade payables 4 603 794 3 839 - - 9 236
Accruals 16 3 9 - 178 206
Other payables 711 - 218 - 367 1 296
Trade payables
to related
parties 154 1 59 - 557 771
Unitholders for - - - - 30 047 30 047
distribution
Non-permissible - - - - 1 269 1 269
income available
for dispensation
5 484 798 4 125 - 32 418 42 825
Net current
segment assets/
(liabilities) (677) (123) 2 651 95 508 (31 620) 65 739
Capital
expenditure 5 765 - 532 - - 6 297
Segment information for the 6 months ended 30 September 2014
Indus- Invest- Corpo-
Retail Offices trial ments rate Total
R’000 R’000 R’000 R’000 R’000 R’000
Segment revenue
Property income
Rental income 9 129 4 507 9 471 - - 23 107
Recoveries 5 089 1 474 1 934 - - 8 497
Income from
investments
excluding non-
permissible
income
Dividend income
offshore - - - 4 273 - 4 273
Permissible
investment
income- domestic - - - 1 327 - 1 327
Fair value
adjustment to
financial assets
at fair value
through profit
or loss - - - 630 - 630
14 218 5 981 11 405 6 230 - 37 834
Segment expense
Property
expenses 8 129 1 650 2 680 - - 12 459
Service charges - - - - 1 711 1 711
Other operating
expenses - - - - 545 545
8 129 1 650 2 680 - 2 256 14 715
Realised gain on
disposal of
available-for-
sale financial
assets - - - 1 019 - 1 019
Segment result
Operating
profit/(loss) 6 089 4 331 8 725 7 249 (2 256) 24 138
Net finance
income
Interest
received - - - - 155 155
Net
profit/(loss)
before straight-
line lease
income and fair
value adjustment
to investment
properties 6 089 4 331 8 725 7 249 (2 101) 24 293
Straight-lining
of lease income 638 - 1 082 - - 1 720
Fair value
adjustment to
investment
properties (638) - (1 082) - - (1 720)
Net
profit/(loss)
after straight-
line lease
income and fair
value adjustment
to investment
properties 6 089 4 331 8 725 7 249 (2 101) 24 293
Segment assets
Investment
properties 174 940 95 699 160 381 - - 431 020
Property, plant
and equipment 423 52 - - - 475
Straight-line
lease accrual
non-current 3 076 - 4 813 - - 7 889
Straight line
lease accrual
current 516 - 1 663 - - 2 179
Available-for-
sale financial
assets - - - 330 251 - 330 251
Other short term - - - 9 464 - 9 464
financial assets
Trade
receivables 1 644 404 3 355 - - 5 403
Trade
receivables from
related parties - - - - 1 239 1 239
Other
receivables 290 114 2 429 1 012 2 078 5 923
Financial assets
at fair value
through profit
or loss - - - 41 394 - 41 394
Cash and cash
equivalents - - - 4 441 - 4 441
180 889 96 269 172 641 386 562 3 317 839 678
Segment
liabilities
Trade payables 3 365 662 4 038 - (10) 8 055
Accruals 7 2 12 - 187 208
Other payables 511 14 813 - 334 1 672
Trade payables
to related
parties 141 - 47 - 327 515
Unitholders for
distribution - - - - 22 995 22 995
Non-permissible
income available
for dispensation - - - - 236 236
4 024 678 4 910 - 24 069 33 681
Net segment
assets/
(liabilities) 176 865 95 591 167 731 386 562 (20 752) 805 997
Capital
expenditure 2 480 - 3 224 - - 5 704
Segment information for the 6 months ended 31 March 2015
Indus- Invest- Corpo-
Retail Offices trial ments rate Total
R’000 R’000 R’000 R’000 R’000 R’000
Segment revenue
Property income
Rental income 9 602 4 983 10 514 - - 25 099
Recoveries 5 201 1 972 1 792 - - 8 965
Income from
investments
excluding non-
permissible
income
Dividend income
offshore - - - 5 565 - 5 565
Permissible
investment
income- domestic - - - 2 393 - 2 393
14 803 6 955 12 306 7 958 - 42 022
Segment expense
Property
expenses 8 139 2 719 4 848 - - 15 706
Service charges - - - - 1 932 1 932
Other operating - - - - 498 498
expenses
8 139 2 719 4 848 - 2 430 18 136
Segment result
Operating
profit/(loss) 6 664 4 236 7 458 7 958 (2 430) 23 886
Net finance
income
Interest
received - - - - 207 207
Non-permissible
income dispensed (351) - - - (362) (713)
Net
profit/(loss)
before straight-
line lease
income and fair
value adjustment
to investment
properties 6 313 4 236 7 458 7 958 (2 585) 23 380
Straight-lining
of lease income 513 - 211 - - 724
Fair value
adjustment to
financial assets
at fair value
through profit
or loss - - - 1 288 - 1 288
Fair value
adjustment to
investment
properties 4 076 1 402 14 431 - - 19 909
Net
profit/(loss)
after straight-
line lease
income and fair
value adjustment
to investment
properties 10 902 5 638 22 100 9 246 (2 585) 45 301
Segment assets
Investment
properties 181 257 97 378 175 208 - - 453 843
Property, plant
and equipment 419 48 - - - 467
Straight-line
lease accrual
non-current 3 615 - 4 597 - - 8 212
Straight line
lease accrual
current 491 - 2 089 - - 2 580
Available-for-
sale financial
assets - - - 379 998 - 379 998
Other short term
financial assets 2 556 - 2 638 - - 5 194
Trade
receivables 1 445 326 440 - - 2 211
Trade - - - - 110 110
receivables from
related parties
Other
receivables 335 - 1 971 3 526 590 6 422
Financial assets
at fair value
through profit
or loss - - - 53 414 - 53 414
Cash and cash
equivalents - - - 18 498 - 18 498
190 118 97 752 186 943 455 436 700 930 949
Segment
liabilities
Trade payables 3 420 790 3 387 - - 7 597
Accruals 73 5 30 - 126 234
Other payables 727 - 234 - 640 1 601
Trade payables
to related
parties 125 - 52 - 524 701
Unitholders for - - - - 25 173 25 173
distribution
Non-permissible - - - - 906 906
income available
for dispensation
4 345 795 3 703 - 27 369 36 212
Net current
segment assets/
(liabilities) 482 (469) 3 433 75 438 (26 667) 52 217
Capital
expenditure 2 686 384 284 - - 3 354
Basis of preparation and accounting policies
The condensed interim financial statements of Oasis Crescent Property
Fund (“the Fund” or “OCPF”) have been prepared in accordance with
International Financial Reporting Standards (IFRS), JSE Listings
Requirements, the requirements of the Collective Investment Schemes
Control Act of 2002, the SAICA Financial Reporting Guides, as issued
by the Accounting Practices Committee, and the Financial Reporting
Pronouncements, as issued by the Financial Reporting Standards
Council. The financial statements are prepared on the historical cost
basis as modified by the revaluation of investment properties,
financial assets at fair value through profit or loss and available-
for-sale financial assets. The accounting policies and methods of
computation applied in this interim report are consistent with the
policies as set out in the most recent annual financial statements,
which should be read in conjunction with this report, except as set
out below. The condensed interim financial statements have been
prepared under the revised disclosure requirements of IAS 34. The
Fund’s external auditor, PricewaterhouseCoopers Inc., has reviewed
the financial information set out in this report. Their unqualified
review report is available for inspection at the Fund’s registered
office. The operational results of the Fund are not affected by
seasonal or cyclical fluctuations.
These condensed reviewed results were compiled by Michael Swingler
CA(SA).
Fair value estimation of investments
Financial instruments and other assets carried at fair value are
valued in terms of IFRS 13.
The fair value of financial instruments traded in active markets
(such as available-for-sale securities) is based on quoted market
prices at the end of the reporting period.
Specific valuation techniques used to determine fair value include:
• Level 1: Quoted prices (unadjusted) in active markets for identical
assets or liabilities;
• Level 2: Inputs other than quoted prices included in Level 1 that
are observable for the asset or liability, either directly (as
prices) or indirectly (derived prices); and
• Level 3: Inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The Fund transfers assets between levels in the fair value hierarchy
on the date that there is a change in the circumstances that give
rise to the transfer.
The information below analyses financial assets and financial
liabilities, which are carried at fair value, by level of hierarchy
as required by IFRS 7 and IFRS 13.
The following table presents the Fund’s assets that are measured at
fair value at 30 September 2015:
Assets Level 1 Level 2 Level 3 Total
R ’000 R ’000 R ’000 R ’000
Available-for-sale financial
assets
Investment in Oasis Crescent
Global Property Equity Fund - 377 816 - 377 816
Investment in listed 34 099 - - 34 099
property funds
Investment in Oasis Crescent
International Property Equity
Feeder Fund - - - -
Financial assets at fair value through profit or loss
Investment in Oasis Crescent
Income Fund - 90 195 - 90 195
Other short-term financial
assets excluding money market
funds - 5 420 - 5 420
Investment property - - 459 072 459 072
The following table presents the Fund’s assets that are measured at fair
value at 30 September 2014:
Assets Level 1 Level 2 Level 3 Total
R ’000 R ’000 R ’000 R ’000
Available-for-sale financial
assets
Investment in Oasis Crescent
Global Property Equity Fund - 298 655 - 298 655
Investment in listed
property funds 29 851 - - 29 851
Investment in Oasis Crescent
International Property Equity
Feeder Fund - 1 745 - 1 745
Financial assets at fair value through profit or loss
Investment in Oasis Crescent
Income Fund - 41 394 - 41 394
Other short-term financial
assets excluding money market
funds - 4 964 - 4 964
Investment property - - 431 020 431 020
The following table presents the Fund’s financial assets that are measured
at fair value at 31 March 2015:
Assets Level 1 Level 2 Level 3 Total
R'000 R'000 R'000 R'000
Available-for-sale financial
assets
Investment in Oasis Crescent
Global Property Equity Fund - 342 789 - 342 789
Investment in listed property
funds 35 210 - - 35 210
Investment in Oasis Crescent
International Property Equity
Feeder Fund - 1 999 - 1 999
Financial assets at fair value
through profit or loss
Investment in Oasis Crescent
Income Fund - 53 414 - 53 414
Other short-term financial
assets - 5 194 - 5 194
Investment property - - 453 843 453 843
The fair value of financial liabilities approximates their fair value due
to the short term nature of the instruments.
The fair value of financial instruments traded in active markets is based
on quoted market prices at the statements of financial position date. A
market is regarded as active if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing
service, or regulatory agency, and those prices represent actual and
regularly occurring market transactions on an arm's length basis. These
instruments are included in level 1.
The instruments included in level 2 comprise of Irish stock exchange
property equity investments classified as available-for-sale and
investments in shari'ah compliant instruments classified as financial
assets at fair value through profit or loss. The fair value of financial
instruments that are not traded in an active market is determined by using
valuation techniques. These valuation techniques maximise the use of
observable market data where it is available and rely as little as
possible on entity specific estimates. If all significant inputs required
to fair value an instrument are observable, the instrument is included in
level 2. If one or more of the significant inputs is not based on
observable market data, the instrument is included in level 3.
Specific valuation techniques used to value financial instruments
include:
Available-for-sale financial assets
Oasis Crescent Global Property Equity Fund:
The fair value of investments in the Oasis Crescent Global Property Equity
Fund is determined using the closing Net Asset Value (NAV) price published
by Oasis Global Management Company (Ireland), the management company of
the fund, and listed on the Irish Stock Exchange. The shares are not
actively traded on the Irish Stock Exchange and are therefore not included
in Level 1.
Investment in listed property funds
The fair value of these investments is determined using the closing price
as at statement of financial position date. These shares are listed and
traded on the JSE Stock Exchange and are therefore classified as Level 1.
Financial assets at fair value through profit or loss
Oasis Crescent Income Fund
The fair value of investments in Oasis Crescent Income Fund is determined
using the closing net asset value (“NAV”) price published by Oasis
Crescent Management Company Limited, the management company of the fund.
These investments are not actively traded on an exchange and are therefore
not classified as Level 1.
Investment property
Reviewed Reviewed Audited
6 months 6 months 31
to 30 to 30 March
September September 2015
2015 2014
R’000 R’000 R’000
Balance as at beginning of the
period 453 843 427 201 427 201
Fair value adjustment on
investment properties excluding
straight-lining of lease income (621) (1 720) 18 189
Movement in lease incentives (447) (165) (605)
Additions to investment
properties 6 297 5 704 9 058
Balance at the end of the period 459 072 431 020 453 843
The valuation of investment properties includes discounted cash flow and
net income capitalisation, using contracted rental income and other cash
flows. Capitalisation rates used in the valuations are the most recent
rates published by the South African Property Owners Association (SAPOA).
The principal assumptions underlying estimation of fair value are those
related to the receipt of contractual rentals, expected future market
rentals, void periods ranging from 0% to 5%, maintenance requirements and
appropriate discount rates. These valuations are regularly compared to
actual market yield data, actual transactions by the Fund and those
reported by the market. Valuations were carried out as at 31 March 2015 by
Mills Fitchet Magnus Penny, an independent, professional valuer registered
without restriction in terms of the Property Valuers Act No. 47 of 2000.
The valuation of investment properties requires judgement in the
determination of future cash flows and an appropriate capitalisation rate
which varies between 6.75% and 13% (2014: 8.3% and 13%). Changes in the
capitalisation rate attributable to changes in market conditions can have
a significant impact on property valuations. The valuation of investment
properties may also be influenced by changes in vacancy rates.
There have been no significant transfers between level 1, 2 or 3 during
the period under review, nor were there any significant changes to the
valuation techniques and inputs used to determine fair values.
Related party transactions and balances
Identity of the related parties with whom material transactions have
occurred
Oasis Crescent Property Fund Managers Ltd. (“the Manager”) is the
management company of the Fund in terms of the Collective Investment
Schemes Control Act.
Oasis Group Holdings (Pty) Ltd. is a tenant at The Ridge@Shallcross and
the parent of the Manager.
As disclosed in the prospectus of Oasis Crescent Global Property
Equity Fund, a management fee is charged for investing in the Oasis
Crescent Global Property Equity Fund by Oasis Global Management
Company (Ireland) Limited, the manager of that fund.
As disclosed in the prospectus of Oasis Crescent Income Fund and
Oasis Crescent International Property Equity Feeder Fund, a
management fee is charged for investing in the Oasis Crescent Income
Fund by Oasis Crescent Management Company Ltd., the manager of those
funds.
Abli Property Developers (Pty) Ltd. renders property development
consulting services to the Fund on capital development projects.
There are common directors to the Manager, Oasis Group Holdings (Pty)
Ltd., Oasis Global Management Company (Ireland) Limited, Oasis
Crescent Management Company Ltd. and Abli Property Developers (Pty)
Ltd. Transactions with related parties are executed on terms no less
favorable than those arranged with third parties.
Type of related party transactions
The Fund pays a service charge and a property management fee on a monthly
basis to the Manager.
The Fund pays a consulting fee to Abli Property Developers (Pty) Ltd. for
consulting services rendered in respect of capital development projects.
Related party transactions
6 months to 6 months to 12 months
30 September 30 September to 31 March
2015 2014 2015
Related party transactions R’000 R’000 R’000
Service charge paid to Oasis
Crescent Property Fund Managers
Ltd. 2 121 1 711 3 643
Property management fees paid to
Oasis Crescent Property Fund
Managers Ltd 600 545 1 112
Consulting fees paid to Abli
Property Developers(Pty) Ltd. for
consulting services on capital
projects 96 127 197
Rental and related income paid by
Oasis Group Holdings (Pty) Ltd. at
the Ridge@Shallcross 201 216 413
Related party balances
6 months to 6 months to As at
30 September 30 September 31 March
2015 2014 2015
Related party balance R’000 R’000 R’000
Trade receivables from Oasis Group
Holding (Pty) Ltd. 110 1 239 110
Trade (payables to)/receivables
from Oasis Crescent Property Fund
Managers Ltd. (680) (455) (658)
Trade Payables to Abli Property
Developers(Pty) Ltd. (49) (21) (4)
Trade payables to from Oasis Group
Holding (Pty) Ltd. (43) (39) (39)
Manager’s report
INTRODUCTION
The Oasis Crescent Property Fund is a well-diversified REIT invested in
South African direct and listed property investments and high quality global
listed REIT’s. The Fund has a strong balance sheet with no debt and
substantial reserves which provide flexibility to take advantage of
opportunities.
The objective of the Manager is to protect and grow the real wealth of
investors by providing sustainable growth in NAV and delivering a consistent
income stream that has potential to grow. Our focused approach has delivered
significant real wealth for investors with an annualised total unitholder
return of 13.8% relative to annualised inflation of 6.1% since inception,
outperforming inflation by an average of 7.7% per annum. Your Fund’s
annualised total intrinsic value return is 14.3% per annum since inception.
Figures in %
Cumulative returns Since HY2016 FY2015 FY2014 FY2013 FY2012
Inception
Unitholder return 253.6 253.6 227.3 165.3 125.9 104.2
Intrinsic value 270.4 270.4 248.7 194.6 161.0 124.1
return
Inflation 78.8 78.8 71.7 65.2 56.0 47.3
HY2016 FY2015 FY2014 FY2013 FY2012
Annual Returns Since
Inception
Unitholder return 13.8 8.0 23.4 17.4 10.7 7.8
Intrinsic value 14.3 6.2 18.4 12.9 16.4 11.2
return
Inflation 6.1 4.1 3.9 5.9 5.9 6.0
Market Price 1 830 1 750 1 500 1 350 1 300
NAV 1 978 1 919 1 706 1 587 1 439
Figures in %
Cumulative returns FY2012 FY2013 FY2014 FY2015 HY2016 Since
Inception
Unitholder return 104.2 125.9 165.3 227.3 253.6 253.6
Intrinsic value 124.1 161.0 194.6 248.7 270.4 270.4
return
Inflation 47.3 56.0 65.2 71.7 78.8 78.8
Annual Returns FY2012 FY2013 FY2014 FY2015 HY2016 Since
Inception
Unitholder return 7.8 10.7 17.4 23.4 8.0 13.8
Intrinsic value 11.2 16.4 12.9 18.4 6.2 14.3
return
Inflation 6.0 5.9 5.9 3.9 4.1 6.1
NAV 1 439 1 587 1 706 1 750 1 830
Market Price 1 300 1 350 1 500 1 919 1 978
MARKET OVERVIEW
Globally, the US is leading the Developed Markets with positive net
absorption (Demand exceeds Supply) of space which is resulting in higher
occupancy and positive rental reversion. In the current environment, stock
selection is becoming increasingly important and REIT’s with stronger rental
growth, enhancing developments and superior balance sheets are well
positioned to outperform as bond yields normalise over the medium term.
In South Africa, proven retail locations are still experiencing reasonable
demand from the national food and fashion tenants while new shopping centre
developments over the period from 2015 to 2017 are expected to be below the
long term average levels. Demand in the office sector is dependent on
employment and business confidence which will take time to recover. Demand
for well-located logistic space remains reasonable with low vacancies while
the manufacturing environment is less favourable.
PORTFOLIO OVERVIEW
HY2016 HY2015 FY2015
R'mil % R'mil % R'mil %
Direct Property 470 48 441 52 465 50
Cash, SA
Investments and
other 141 14 100 12 121 13
Global Investments 378 38 299 36 345 37
Total Assets 989 100 840 100 931 100
The Fund has focused on building a portfolio with a combination of high
quality direct property investments and global listed REIT’s with properties
located in the major global cities, which adds geographic and currency
diversification. The direct property portfolio includes exposure to the
retail, industrial and office sectors and it has a high exposure to the
Western Cape. In order to attract world class tenants, there is continuous
investment in and maintenance of the direct properties. The global
investments consist of the Oasis Crescent Global Property Equity Fund which
is well positioned with a focus on REIT’s with the best quality assets and
balance sheets. The cash and other listed SA Investments provide flexibility
for The Fund to pursue growth opportunities.
REVIEW OF RESULTS AND OPERATIONS
Highlights
- Distribution per unit increased to 60.6 cents per unit (HY2015:49.0
cents)
- Net asset value per unit increased by 11.5% to 1 978 cents per unit
(HY2015: 1 774)
- Intrinsic value return of 14.3% per annum since inception compared to
inflation of 6.1% per annum
1H2016 1H2015 FY2015
Distribution per unit including non-
permissible income (cents) 61.4 50.2 102.3
Distribution per unit excluding non-
permissible income (cents) 60.6 49.0 100.7
Property portfolio valuation (R’mil) 470 441 465
Investment in Offshore Listed
Properties(R’mil) 378 300 345
Investment in Local Listed Properties
and other current assets (R’m) 42 43 44
Cash and cash equivalents (R’mil) 99 55 77
Net asset value per unit (cents) 1 978 1 774 1 919
Listed market price at year end
(cents) 1 830 1 600 1 750
Results Overview
HY
HY2016 HY2015 FY2015 2016/2015
(R'000) (R'000) (R'000) %
Direct property net income 22 453 19 145 37 153 17
Global Investment Income 4 803 4 273 9 838 12
Cash and Local Investment
Income 4 460 1 482 3 720 201
Shared expense (3 016) (2 817) (4 686) 7
Distributable Income excl
NPI 28 700 22 083 46 024 30
During this period, the Fund benefitted from the active asset management and
successful refurbishment which resulted in solid growth in rentals and
property expense recoveries. The investment income earned from the global
investments benefited from the weaker Rand while the investment income from
the SA listed investments was higher due to the timing of dividend income as
a result of the normal asset management process. Investment income from the
Oasis Crescent Income Fund increased significantly due to the increased
investment of cash flows and higher profit rates. The higher service charge
expense is due to the increase in the market capitalisation of the Fund. The
weighted average units in issue increased due to a high proportion of
unitholders electing to reinvest their dividends in additional units. The
Fund continues with implementation of its leasing strategy which includes
lease expiries for 2016 and further improvements in the quality of the
tenant mix.
Direct Property Portfolio Characteristics
Geographical Profile
Rentable Revenue Revenue Revenue
Area HY2016 HY2015 FY2015
Area
(m²) % (R'mil) % (R'mil) % (R'mil) %
Western Cape 74 718 82 21.4 60 19.4 61 40.3 61
KwaZulu-Natal 16 043 18 14.5 40 12.4 39 26.0 39
Total - Direct
Property (excl
straight-lining) 90 761 100 35.9 100 31.8 100 66.3 100
Revenue includes property rental and recoveries
Segmental Profile
HY2016 HY2015 FY2015
Average Average Average
Rentable Average rental Average rental Average rental
area rental escalation rental escalation rental escalation
Segment (m²) per m² per m² (%) per m² per m² (%) per m² per m² (%)
Retail 18 764 116 8 119 8 117 8
Office 6 608 125 9 110 9 125 9
Industrial 65 389 28 8 29 8 26 8
TOTAL 90 761
Vacancy Profile
% of total
rentable area HY2016 HY2015 FY2015
Retail 1.4 2.4 1.7
Office 0 0 0
Industrial 0 0 0
1.4 2.4 1.7
Lease expiry profile
HY2016 HY2015 FY2015
Rental Revenue Rental Revenue Rental Revenue
Area % % Area % % Area % %
- Within 1 year 40 46 4 11 29 43
- Within 2 year 21 16 40 45 34 23
- Within 3 year 5 8 20 14 3 3
- Within 4 year 1 3 3 2 1 3
- Within 5 year
or more years 33 27 33 28 33 28
100 100 100 100 100 100
Tenant Profile
HY2016 HY2015 FY2015
(%) (%) (%)
A - Large nationals, large listed, large
franchisees, multi-nationals and
government 71 71 72
B - Nationals, listed, franchisees and
medium to large professional firms 17 18 18
C - Other 12 11 10
TOTAL 100 100 100
Tenants are classified as large or major (“A” grade) or medium to large (“B”
grade) based on their financial soundness, profile and global or national
footprint.
Investment Portfolio Characteristics
The investment in high quality global listed REIT’s provide geographic and
sector diversification and with Global REIT cash flow and dividend yields
remaining attractive relative to bond yields, the Oasis Crescent Global
Property Equity Fund is well positioned. The average cash flow yield of the
fund is 6.2% and the dividend yield is 4.9% which continues to offer value
relative to the average bond yield and inflation of 2.0% and 0.6%
respectively. The Fund invests its liquid reserves in the Oasis Crescent
Income Fund which provides competitive, Shariah compliant income and
flexibility to take advantage of opportunities.
OUTLOOK
The Fund will focus on renewing existing leases and further improving the
tenant quality while continuing to invest in its properties. The accumulated
cash and liquid reserves provide the flexibility to take advantage of
opportunities. Post year-end the Fund has acquired two properties in the
Western Cape being 24 Milner Road and 265 Victoria Road for R18.5 million
and R24 million respectively. These properties have location advantages,
they are either materially upgraded or have development potential. The
global investments will continue to provide diversification benefits to
investors and will remain a unique characteristic of the Fund. Management
are confident in the strategy of the Fund.
ADDITIONAL INFORMATION
Property management
Property management is outsourced to the Manager and external service
providers. The amount paid to the Manager was R0.600 million (HY2015: R0.544
million)
Service charge
The service charge is equal to 0.5% per annum of the Fund’s market
capitalization and borrowing facilities based on the average daily closing
prices of the units. The amount paid to the Manager was R2.121 million
(HY2015: R1.711 million)
Units in issue
As at 30 September 2015 the number of units in issue was 47 849 435 (HY2015:
45 427 278)
Unitholders' holding more than 5% of issued units as at 30
September 2015:
NUMBER OF HOLDING
NAME UNITS (%)
Oasis Crescent Balanced Progressive
Fund of Funds 8 764 362 18.3
Oasis Crescent Balanced Stable Fund
of Funds 4 384 546 9.2
Oasis Crescent Property Company
(Pty) Ltd. 4 151 721 8.7
Oasis Crescent Retirement Annuity
High Equity Fund 3 332 598 7.0
Oasis Crescent Pension Annuity
Stable Fund 3 027 520 6.3
BNP Paribas Securities London 2 811 511 5.9
Oasis Crescent Balanced High Equity
Fund of Funds 2 693 905 5.6
Oasis Crescent Income Fund 2 385 155 5.0
TOTAL 66.0
Shareholding in the Manager
OCPFM is 100% owned by Oasis Group Holdings (Pty) Ltd.
Changes to the Board
There were no changes to the board of directors during the 6 month period
ended 30 September 2015.
Distribution declaration and important dates
Notice is hereby given that a distribution after non-permissible
income in respect of the six months ended 30 September 2015 of
6 057.265 cents for every 100 units held, has been declared payable
to unit holders recorded in the register of the Fund at close of
business on Friday, 20 November 2015. Unitholders may elect to
receive the distribution in cash or to reinvest the distribution
by the purchase of new units at a rate of 3.06193 units at 1 978.25
cents per units (in aggregate) for every 100 units so held.
Unitholders should take note of the corporate action timetable as
set out below in respect of the above distribution and the
election in terms thereof:
2015
Declaration announcement on SENS of Wednesday, 14 October
distribution and right of election
to purchase new units or receive a
cash payment
Circular and form of election Friday, 30 October
posted to unitholders
Finalisation announcement on SENS Friday, 30 October
in respect of distribution and
right of election to purchase new
units or receive a cash payment
Last day to trade in order to be Friday, 13 November
eligible for the distribution
Trading commences ex-entitlement to Monday, 16 November
the distribution
Listing of maximum possible number Wednesday, 18 November
of units that may be purchased, at
commencement of trade on
Closing date for the election of Friday, 20 November
cash distribution at 12:00 pm
Record date for the distribution Friday, 20 November
Cash distribution cheques posted Monday, 23 November
and CSDP/broker accounts updated
with cash
Unit certificates posted and Wednesday, 25 November
CSDP/broker accounts updated with
units
Announcement of the results of the Wednesday, 25 November
distribution on SENS
Adjustment of number of new units Friday, 27 November
listed on or about
Note:
1. Unitholders reinvesting their distribution in new units are
alerted to the fact that the new units will be listed 3
business days after the last day to trade and that these new
units can only be traded 3 business days after the last day to
trade, due to the fact that settlement of the units will be 3
business days after the record date, which differs from the
conventional one business day after the record date settlement
process.
2. Units may not be dematerialised or rematerialised between
Monday, 16 November 2015 and Friday, 20 November 2015, both
days inclusive
3. The above dates and times are subject to change. Any changes
will be announced on the Stock Exchange News Service (“SENS”).
4. All times quoted are South African times.
5. Dematerialised unitholders should provide their CSDP or broker
with their election instructions by the cut-off time stipulated
in terms of their custody agreement with such CSDP or broker.
6. If no election is made, the distribution accrued to the
unitholder will be reinvested and used to purchase additional
units, as set out above.
Tax implications of the distribution
In respect of the distribution, the Manager hereby informs unitholders,
who will receive the distribution, that for taxation purposes, OCPF is
a REIT as defined in the Income Tax Act as from 1 April 2013 and,
accordingly, the tax implications of the distribution have changed as
from that date. The distribution will not be exempt from income tax in
terms of section 10(1)(k) of the Income Tax Act.
For South African tax residents, the distribution will be exempt from
dividends tax in terms of section 64F(l) of the Income Tax Act,
provided that you, as unitholder, provide the transfer secretary or
your nominee, custodian or CSDP with confirmation of your tax residence
status in the prescribed form. If you do not provide the required
residence status, they will have no choice but to withhold dividends
tax at a rate of 15%.
For non-resident unitholders, for South African tax purposes, the
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 tax residence of the
unitholder. Non-resident unitholders that believe that a reduced rate
of tax applies in respect of their applicable DTA should contact the
transfer secretary or their nominee, custodian or CSDP for the
prescribed form to record the reduced rate of tax.
Where dividends tax is withheld at 15%:
- the reinvestment ratio for non-resident unitholders will be
2.60264 units at 1 978.25 cents per unit, for every 100 (one
hundred) units held;
- should such unitholders elect to receive the distribution in cash,
they will receive 5 148.675 cents per 100 units held on the record
date.
The Income Tax Act sections applicable to the distributions made are as
follows:
- Property income distribution from a REIT – section 10(1)(k) and
section 64F(l)
Both resident and non-resident unitholders are encouraged to consult
their professional tax advisors with regard to their individual tax
liability in this regard.
Units in issue at date of declaration of the distribution: 47 849 435.
Income tax reference number: 3354212148
A circular will be posted to unitholders on or about 30 October 2015 in
respect of the distribution.
By order of the Board
Oasis Crescent Property Fund Managers Limited
Cape Town
14 October 2015
Designated Advisor
PSG Capital Proprietary Limited
Date: 14/10/2015 05:30:00 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.