Wrap Text
Reviewed condensed consolidated interim results for the six months ended 30 September 2015
Investec Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2008/011366/06)
Share code: IPF ISIN: ZAE000180915
(Income tax reference number 9332/719/16/1)
Reviewed condensed consolidated interim results
for the six months ended 30 September 2015
Highlights
9.1% dividend growth
on prior year
Interim dividend of 59.63 cps
>62 000m2 space let
in current period
with positive reversions
Strong base portfolio net property
income growth of
8.8%
driven by underlying
property fundamentals
Griffin and Zenprop
acquisitions announced
R7.9bn
doubling the size of the Fund's
portfolio to R16.4bn
Vacancy rate of
2.8%
one of the lowest in the sector
Rights issue and
vendor placement announced
R3.6bn
Long WALE of
4.0 years
40% expires after 5 years
Consolidated statement of comprehensive income
Reviewed Reviewed
Six months Six months Audited
ended ended Year ended
30 September 30 September 31 March
R'000 Notes 2015 2014 2015
Revenue, excluding straight-line rental revenue adjustment 438 923 336 231 725 664
Straight-line rental revenue adjustment 68 845 45 590 120 765
Revenue 507 768 381 821 846 429
Property expenses (78 452) (60 192) (120 559)
Net property income 429 316 321 629 725 870
Other operating expenses (28 536) (21 541) (42 703)
Operating profit 400 780 300 088 683 167
Fair value adjustments 2, 3 36 478 (14 418) 293 118
Profit on disposal of investment property 2 630 – 2 444
Income from investment 19 314 8 483 32 981
Finance costs (89 837) (60 521) (136 648)
Finance income 2 632 3 173 9 602
Profit before taxation 371 997 236 805 884 664
Taxation (789) (193) –
Profit after taxation 371 208 236 612 884 664
Items that may be reclassified to profit and loss:
Other comprehensive income: (loss) on cash flow hedge – (276) (276)
Total comprehensive income attributable to equity holders 371 208 236 336 884 388
Dividend reconciliation
Profit after taxation 371 208 236 612 884 664
Less: Fair value adjustments (36 478) 14 418 (293 118)
Profit on disposal of investment property (2 630) – (2 444)
Straight-line rental revenue adjustment (68 845) (45 590) (120 765)
Antecedent dividend 2 065(1) 3 458 32 530
Interim dividend 265 320 208 898 500 867
Number of shares
Shares in issue 5 444 978 329(2) 382 234 219(3) 436 690 118(3)
Weighted average number of shares in issue 441 562 857 368 570 813 391 664 683
Cents
Interim dividend per share 59.63 54.65 119.15
Basic earnings per share 84.07 64.12 225.87
Headline earnings per share 83.47 64.20 142.17
(1) Antecedent interest is as a result of the DRIP programme, issued 15 June 2015.
(2) At 30 September 2015. A further 35.8 million new shares were listed on 28 October 2015 at R15,70 in terms of the Griffin vendor placement.
(3) These periods include shares to be issued.
Consolidated statement of financial position
Reviewed Reviewed
Six months Six months
ended Audited ended
30 September 31 March 30 September
R'000 2015 2015 2014
ASSETS
Non-current assets 8 868 534 8 706 536 6 911 154
Investment property 8 017 017 7 964 158 6 468 862
Straight-line rental revenue adjustment 306 311 237 467 162 292
Derivative financial instruments 14 732 2 815 –
Investment 530 474 502 096 280 000
Current assets 245 461 127 960 153 141
Trade and other receivables 101 615 66 965 70 467
Cash and cash equivalents 143 846 60 995 82 674
Total assets 9 113 995 8 834 496 7 064 295
EQUITY AND LIABILITIES
Shareholders' interest 6 857 226 6 615 768 5 370 350
Stated capital 5 813 900 5 677 360 4 874 558
Retained earnings 1 043 326 938 408 495 792
Non-current liabilities 1 815 968 1 736 164 1 231 542
Long-term borrowings 1 795 589 1 718 109 1 229 757
Derivative financial instruments 20 379 18 055 1 785
Current liabilities 440 801 482 564 462 403
Trade and other payables 200 822 148 564 128 403
Current portion of non-current liabilities 239 979 334 000 334 000
Total equity and liabilities 9 113 995 8 834 496 7 064 295
Condensed consolidated statement of cash flows
Reviewed Reviewed
Six months Audited Six months
ended Year ended ended
30 September 31 March 30 September
R'000 2015 2015 2014
Cash generated from operations 359 489 613 090 283 232
Finance income received 2 632 9 602 3 173
Finance costs paid (83 965) (118 258) (47 080)
Income from investment 17 824 24 551 7 982
Taxation paid (789) – 380
Dividends paid to shareholders (281 650)(1) (426 026) (206 927)
Net cash inflow from operating activities 13 541 102 959 40 760
Net cash outflow from investing activities(2) (50 229) (1 882 117) (1 032 616)
Net cash inflow from financing activities(3) 119 540 1 481 837 716 214
Net increase/(decrease) in cash and cash equivalents 82 852 (297 321) (275 642)
Cash and cash equivalents at the beginning of the year 60 995 358 316 358 316
Cash and cash equivalents at the end of the period 143 847 60 995 82 674
(1) Dividends paid are shown gross of R15.3 million antecedent dividends later recovered.
(2) Investing activities include investment property acquired, additions and improvements to investment properties and proceeds from sale of investment
properties.
(3) Financing activities include term loans raised and repaid, corporate bonds issued and repaid and proceeds from issue of shares.
Condensed consolidated statement of changes in equity
Reviewed Reviewed
Six months Six months
ended ended Audited
30 September 30 September 31 March
R'000 2015 2014 2015
Balance at the beginning of the year 6 615 768 5 112 629 5 112 629
Total comprehensive income attributable to equity holders 371 208 236 336 884 388
Shares issued 136 540 228 801(1) 1 044 777(1)
Dividends paid (266 290) (207 416) (426 026)
Balance at the end of the period 6 857 226 5 370 350 6 615 768
(1) These periods include shares that were to be issued post period end in terms of contractual obligations.
Condensed consolidated segmental information
For the six months ended 30 September 2015
R'000 Office Industrial Retail Total
Statement of comprehensive income extract
Revenue, excluding straight-line rental revenue adjustment 166 077 93 964 178 882 438 923
Straight-line rental revenue adjustment 14 354 10 527 43 964 68 845
Revenue 180 431 104 491 222 846 507 768
Property expenses (25 272) (17 108) (36 072) (78 452)
Net property income 155 159 87 383 186 774 429 316
Statement of financial position extracts
Investment property opening balance 3 206 963 1 529 919 3 464 743 8 201 625
Net additions, acquisitions and disposals (5 482) 4 490 53 850 52 858
Straight-lining 14 354 10 527 43 964 68 845
Fair value of investment property 3 215 835 1 544 936 3 562 557 8 323 328
For the six months ended 30 September 2014
R'000 Office Industrial Retail Total
Statement of comprehensive income extract
Revenue, excluding straight-line rental revenue adjustment 126 200 79 260 130 771 336 231
Straight-line rental revenue adjustment 24 760 6 461 14 369 45 590
Revenue 150 960 85 721 145 140 381 821
Property expenses (23 174) (13 757) (23 261) (60 192)
Net property income 127 786 71 964 121 879 321 629
Statement of financial position extracts
Investment property opening balance 2 394 397 1 343 734 2 086 702 5 824 833
Net additions, acquisitions and disposals 149 799 – 610 932 760 731
Straight-lining 24 760 6 461 14 369 45 590
Fair value of investment property 2 568 956 1 350 195 2 712 003 6 631 154
Notes to the condensed consolidated financial results
Reviewed Reviewed
Six months Six months
ended ended Audited
30 September 30 September 31 March
R'000 2015 2014 2015
1. Reconciliation of basic earnings to
headline earnings
Total comprehensive income attributable to equity holders 371 208 236 336 884 388
Other comprehensive income – 276 276
Less: Net fair value adjustment – investment property – – (327 848)
Less: Profit on disposal of investment property (2 630) – –
Headline earnings attributable to shareholders 368 578 236 612 556 816
2. Financial instruments
Financial instruments held by the group include the investment in Investec Australia Property Fund ("IAPF") and derivatives.
The valuation of IAPF is based on the closing share price times the number of shares held at the reporting date, which
is a level 1 valuation. Derivative financial instruments hedge interest rate and foreign exchange risk. Interest rate hedging
instruments are valued by discounting future cash flows using the market rate indicated on the interest rate curve at the
dates when the cash flows will take place. Foreign exchange hedging instruments are valued by making reference to
market prices for similar instruments and discounting for the effect of the time value of money. Derivatives are considered
to be level 2 valuations.
For cash and cash equivalents, trade and other receivables, trade and other payables and variable and fixed rate loans which
are carried at amortised cost, the carrying value is a reasonable approximation of fair value. In accordance with IFRS 7.29
no disclosure around fair value is required for these items.
3. Fair value adjustments of investment property
The Fund's policy is to value investment properties, with independent valuations performed on a rotational basis to ensure
each property is valued at least every three years by an independent external valuer. The directors' valuation methods include
using the discounted cash flow model and the capitalisation model. No fair value adjustment was made in the six months
ended 30 September 2015 (Rnil: 30 September 2014) as the directors did not consider the valuation to have changed
materially.
4. Subsequent events
On 5 June 2015 and 11 August 2015 the Fund announced two acquisitions; namely the Griffin portfolio for R826 million and
the Zenprop portfolio for R7.1 billion. At period end neither of these acquisitions had transferred to the Fund. On 29 October
2015, R633 million of the Griffin portfolio transferred to the Fund. More details are included in point 4 of the commentary in
this report.
5. Share capital
The Fund has authorised share capital of one billion no par value shares at 30 September 2015.
During the period the Fund issued 8 288 211 shares on implementation of the dividend re-investment programme ("DRIP")
completed in June 2015 (22 236 654 shares were issued in the same period in the prior year). As at 30 September 2015,
444 978 329 shares were in issue. In October 2015, the Fund issued 35 761 709 shares to Investec Securities Limited to part
fund the R826 million acquisition for Griffin.
Commentary
1. Introduction
Investec Property Fund ("the Fund" or "IPF") is a South African Real Estate Investment Trust, which listed on the JSE in the Real Estate
Holdings and Development Sector on 14 April 2011. At 30 September 2015 the portfolio is comprised of 80 properties in South Africa
with a total GLA of 835 809m2 valued at R8.3 billion and a R0.5 billion investment in Investec Australia Property Fund Limited.
The Fund's existing portfolio reflects a quality tenant base with a high proportion of single-tenanted assets. Together with low
vacancies and a medium-term lease expiry profile, the portfolio provides a sound base for earnings and capital growth over the
long term. The six-month period ending 30 September 2015 has been an active period for the Fund in terms of acquisitions. The
Fund has collectively acquired 48 properties with a value of R7.9 billion through the announced Griffin and Zenprop acquisitions.
These acquisitions almost double the size and enhance the quality and real estate fundamentals of the existing portfolio.
The Directors believe that the acquisition of both the Griffin and the Zenprop Portfolios offer attractive value and will enhance the
prospects of the Fund over time.
Since listing in April 2011, Investec Property Fund has delivered consistent growth in dividend distributions to its Shareholders while
growing its property portfolio over nine times (including the announced Griffin and Zenprop acquisitions) with properties that maintain
or enhance the quality of the portfolio. This has been achieved despite an uncertain economic outlook, highly competitive landscape
and upward pressure on regulated and other operating costs.
2. Financial results
The board of directors is pleased to announce a 9.1% increase in the interim dividend to 59.63 cents per share (cps) for the
six months ended 30 September 2015 (30 September 2014: 54.65 cps).
Dividend growth
cents per share
First half
2012 2013 2014 2015 2016
7.1% 7.8% 8.3% 9.1%
Second half
2012 2013 2014 2015 2016
7.9% 8.6% 8.8%*
Full year
2012 2013 2014 2015 2016
7.5% 8.2% 8.6%*
* After removal of the once-off impact of the IAPF antecedent dividend.
Growth was achieved as a result of strong underlying property performance with base portfolio net property income growth of 8.8%,
strong performance from the R1.9 billion of acquisitions made in FY2015 and 9.4% growth in distribution from the investment in
IAPF. The Fund let or renewed 62 428m2 during the period which enabled the Fund to maintain its vacancy at 2.8% which remains
one of the lowest in the sector. This space, which equates to 7.5% of total GLA, was let with positive reversions and attractive
escalations across all sectors. The Fund's weighted average lease expiry ("WALE") is 4.0 years and is anchored by average portfolio
in-force escalations of 8.1% with 40% of the Fund's leases expiring after five years.
Portfolio Total Office Industrial Retail
Number of properties 80 21 26 33
Asset value R8.3bn R3.2bn R1.5bn R3.6bn
GLA 835 809 163 562 373 797 298 450
Vacancy 2.8% 4.9% 3.1% 1.4%
WALE (years) 4.0 4.5 4.0 3.8
3. Letting activity
The Fund began the period with an opening vacancy of 23 546m2 which increased by a further 61 915m2 expiring during the
period. 82% (50 623m2) of this expiring space was either renewed or re-let. In addition 11 026m2 of the existing vacant space at
the beginning of the period was also re-let. This letting activity displays the quality of the Fund's asset base and its active asset
management approach resulting in the closing vacancy being maintained at 2.8% (23 812m2).
The table below demonstrates the effect of the rental reversions that the Fund achieved during the six months under review:
Average Renewals Average gross Average
Expiries gross expiry and new lets rental renewals/ Rental escalation
GLA rental GLA new lets reversion achieved
m2 R/m2 m2 R/m2 % %
Office 5 882 163.37 5 778 175.21 7.2 8.6
Industrial 42 885 53.35 42 489 54.11 1.4 8.1
Retail 13 148 153.26 14 161 165.45 8.0 7.9
Total 61 915 62 428 8.1
Lease expiry profile by sector (% revenue)
16
Office Industrial Retail Total
1 2 1 4
17
Office Industrial Retail Total
3 3 7 13
18
Office Industrial Retail Total
4 2 7 13
19
Office Industrial Retail Total
5 2 7 14
20
Office Industrial Retail Total
3 5 8 16
April 2020 onwards
Office Industrial Retail Total
18 7 15 40
Vacancy profile
Office
March 2015 September 2015
5.4% 4.9%
Industrial
March 2015 September 2015
3.0% 3.1%
Retail
March 2015 September 2015
1.2% 1.4%
Total
March 2015 September 2015
2.8% 2.8%
4. Acquisitions
The Fund has enjoyed a transformative year from an acquisition perspective with the Fund's asset portfolio base due to almost
double to R16.4 billion.
4.1 Griffin update
On 5 June 2015, the Fund announced the acquisition of the Griffin industrial property portfolio consisting of 22 properties for an
aggregate value of R826 million and at a blended yield of 9.3%. The Griffin acquisition is now unconditional in respect of 19 of the
22 properties, and these properties valued at R633.3 million transferred to the Fund on 29 October 2015. As a result the Fund
issued the vendor placement shares for a value of R561.4 million at an ex-dividend price of R15.70. The balance of R71.9 million
was funded using existing debt facilities.
The AGCO industrial property in Pomona, Danmar/Sabaru dealership in Longmeadow and the Commerce Corner multi-tenanted
office building in Randburg ("Remaining Properties") which have a combined value of R193.1 million, are in the process of being
transferred to the Fund. The transfers are expected to be completed prior to the end of November 2015. The purchase of the
Remaining Properties will be funded using existing debt facilities.
Portfolio growth
At listing
R1.7bn
29 properties
Mar 12
R2.1bn
32 properties
Mar 13
R4.2bn
50 properties
Mar 14
R6.1bn
71 properties
Mar 15
R8.7bn
80 properties
Sep 15
R8.7bn
80 properties
Post acquisitions
R16.4bn*
128 properties
* Announced acquisitions' includes the Griffin and Zenprop porfolios (R825 million; 22 properties and R7.1 billion; 26 properties respectivley).
4.2 Zenprop update
On 11 August 2015 the Fund announced the acquisition of the iconic Zenprop property portfolio ("Zenprop Acquisition") consisting
of 26 properties for an aggregate acquisition value of R7.1 billion ("Acquisition consideration") at a blended yield of 7.5%.
The Zenprop portfolio contains award-winning properties, with exceptional and striking architectural designs, along with strong
property fundamentals consisting of 12 office properties, 11 industrial properties and 3 retail properties. The portfolio is underpinned
by strong real estate fundamentals and contractual cash flows.
On 14 October 2015, the Fund's shareholders overwhelmingly approved the Zenprop Acquisition and the placing of the shares
under the control of the directors. The Zenprop Acquisition remains subject to the approval of the Competition Authorities which is
expected to be obtained late November 2015, early December 2015.
The Zenprop Acquisition consideration is to be funded from a combination of 50% debt and 50% equity, the detail of which is set
out below:
Zenprop Debt
The Fund engaged both banks and debt capital market investors to raise R3.6 billion to fund the debt portion of the purchase
consideration. The Fund received significant levels of interest from all funders approached and has signed either legal documents or
irrevocable undertakings with lenders to fund the transaction.
The weighted average debt expiry of the funding package is 5.4 years at an average credit margin of 1.75% above JIBAR. The Fund
was able to raise 52% of the debt on an unsecured basis, keeping the Fund's encumbrance ratio at 35% post transaction. Post the
transaction, the Fund's gearing ratio will move to c. 35%.
Zenprop rights offer
The R3.6 billion equity component of the Zenprop transaction, as per the details of the Zenprop circular issued 11 September 2015,
will be funded as follows:
- R0.80 billion will be settled through the issue of Investec Property Fund shares to Zenprop at a price of R16.51 (ex dividend)
per share;
- R0.20 billion will be settled through the transfer to Zenprop of Investec Australia Property Fund shares owned by the Fund at a
price of R11.58 per share (ex dividend) per IAPF share; and
- The remaining equity will be funded through a rights offer of c. R2.57 billion ("Rights Offers") at an ex-dividend Right Offer price
of R15.00 per share.
The Fund has received irrevocable undertakings and letters of support from 65.6% of IPF shareholders, and therefore R1.69 billion
of the rights offer has been covered by commitments or indications of support. To the extent the rights offer is not fully subscribed,
any shortfall will be taken by Zenprop and will be settled by the issue of IPF shares at the rights offer price of R15.00 per share.
The Rights Offer and clean out dividend ("Clean Out Dividend") timetable will be aligned, as far as possible, with the receipt of
approval of the Acquisition by the Competition Authorities. Full details of the Rights Offer including the salient dates will be included
in the Rights Offer circular which will be posted to IPF shareholders once clarity regarding approval by the Competition Authorities
has been obtained. To the extent that the Competition Authorities do not approve the Zenprop Acquisition by early December, the
Rights Offer is likely to take place early in the new calendar year.
Clean Out Dividend
In order to enable all existing shareholders to receive their share of accrued income prior to the issue of the Rights Offer shares,
IPF will pay a Clean Out Dividend. The Clean Out Dividend will be paid to all shareholders recorded in the register on the date prior
to the listing of the rights offers shares.
The Clean Out Dividend will be calculated as the pro rata of the dividend from the existing IPF and Griffin portfolios for the period
1 October 2015 to the record date of the Rights Offer. An announcement in relation to the quantum and the timing of the Clean Out
Dividend will be released on SENS in due course. The Clean Out Dividend enables existing IPF shares and the Rights Offer shares to
rank pari passu to the entitlement to dividends from the date of issue of the Rights Offer shares.
5. Portfolio profile
The Fund's acquisition strategy is to source quality assets that meet its investment criteria of sustainability and growth in income and
capital in the long term. This is aligned to management statements from the outset that the Fund may acquire quality assets that are
initially dilutive if the property fundamentals meet the Fund's long-term growth criteria, as is the case with the Zenprop portfolio.
Revenue GLA
Gauteng 67% Gauteng 71%
Western Cape 9% Western Cape 11%
Other* 1% Other* 3%
Free State 6% Free State 8%
Limpopo 2% Limpopo 3%
Mpumalanga 2% Mpumalanga 3%
KwaZulu-Natal 13% KwaZulu-Natal 1%
* "Other" includes Eastern Cape, North West and Northern Cape
Sectoral Spread
Sectoral spread
GLA Revenue Asset value
Office 19% Office 38% Office 39%
Industrial 45% Industrial 21% Industrial 18%
Retail 36% Retail 41% Retail 43%
6. Capital management
During the period the Fund's debt levels remained relatively unchanged from year-end due to timing of new acquisitions.
Gearing remains low at 23.0% and the Fund's hedged ratio is 91%. The Fund's all-in cost of funding has remained flat since year-
end at 8.5%.
7. Credit rating
The Global Credit Rating Co. ("GRC") recently upgraded the Fund's corporate rating upgrade to A(ZA) (previously A-(ZA)), with outlook
accorded as stable, evidencing further support for the strength of the Fund's covenants.
The rationale for the upgrade is that the new acquisitions add scale and post-acquisition the Fund will sit comfortably on the
upper end of middle tier domestic REITs. The acquisitions add defensiveness and income predictability to an already robust
portfolio and enhance the underlying property fundamentals such as WALE, lease expiry and tenant quality. The portfolio also
has a high percentage of 'A' grade tenants. All of the above is supported by a conservative funding profile, a low LTV, a low-asset
encumbrance and ample untapped facilities driven by an asset manager with proven real estate credentials.
8. Capital expenditure and redevelopment
The newly completed R86 million Dihlabeng Woolworths anchored extension of 4 612m2 was successfully opened on 31 July 2015
and entrenched its dominance in the region.
9. Investment in IAPF
The Fund's investment in IAPF amounts to R0.5 billion (18.6% of IAPF), representing 5.7% of the Fund's total portfolio.
IAPF continues to deliver on its listing objectives of acquiring quality real estate underpinned by real estate fundamentals. IAPF
has acquired eight properties with a total value of AUD211 million since its rights offer in October 2014. The attractive yields of the
assets acquired, relative to low funding costs of 4% and the increase in gearing has resulted in IAPF delivering strong half-year
distribution growth of 9.4% in ZAR (post withholding tax).
10. Changes to the Board
In a SENS announcement dated 17 June 2015, shareholders were advised that Khumo L Shuenyane had been appointed to
the Fund's Board as an independent non-executive Director and as a member to the Audit and Risk Committee. The Board look
forward to Khumo's contribution and welcome him to the Board.
Shareholders were further advised on 18 August 2015 that David AJ Donald, having served as Financial Director of the Fund since
its listing, retired with effect from 17 August 2015. The Board wishes to express their gratitude towards David for his contribution
to the Fund. With the retirement of David, the Board announced the appointment of Andrew R Wooler to the Board as Financial
Director with effect from 17 August 2015. The Board is pleased to welcome Andrew and look forward to benefiting from his
continued contribution to the growth of the Fund.
11. Prospects
The Fund expects dividend growth on the existing portfolio in line with previous guidance. The second half dividend will, however,
be impacted by the dilutionary impact of the Zenprop transaction. The extent of the dilution will depend on the date of transfer
of the Zenprop portfolio, which is expected to be December 2015.
This forecast is based on the assumptions that the macro-economic environment will not deteriorate markedly, no major corporate
failures will occur, forecasted renewals will be concluded, that clients will be able to absorb the recovery of rising rates and utility
costs and that the ZAR/AUD exchange rate remains at similar levels to the last financial year. Rental income forecast was based on
contractual escalations and market related renewals.
The information and views expressed above are recorded and expressed in good faith and are based upon sources believed to be
reliable. No representation, warranty, undertaking or guarantee of whatever nature is made or given with regards to the accuracy
and/or completeness of such information and/or the correctness of such opinions.
This forecast has not been reviewed or audited by the Fund's independent external auditors.
On behalf of the Board of Investec Property Fund Limited
Sam Hackner Nick Riley
Non-executive Chairman Chief Executive Officer
19 November 2015
12. Basis of accounting
The reviewed condensed consolidated interim financial information for the period ended 30 September 2015 has been prepared in
compliance with International Financial Reporting Standards (IFRS), the presentation and disclosure requirements of IAS 34, Interim
Financial Reporting, the SAICA Financial Reporting Guide as issued by the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by The Financial Reporting Standards Council, the Companies Act (71 of 2008, as amended) of South
Africa and the JSE Listings Requirements.
The accounting policies applied in the preparation of the interim reviewed condensed consolidated results for the period ended
30 September 2015 are consistent with those adopted in the financial statements for the period ended 30 March 2015, other than
the adoption of those standards that became effective in the current period, which had no impact on the financial results. These
reviewed condensed consolidated financial statements have been prepared under the supervision of Andrew Wooler, ACA.
13. Review conclusion
Ernst & Young Inc., the Fund's independent auditors, have reviewed the consolidated statement of comprehensive income,
consolidated statement of financial position, condensed consolidated statement of cash flows, condensed consolidated statement
of changes in equity, condensed consolidated segmental information and notes to the consolidated condensed financial results,
as set out on pages 3 to 6 of the preliminary condensed consolidated financial results and have expressed an unmodified review
conclusion. A copy of their review conclusion is available for inspection at the company's registered office.
14. Interim dividend
Notice is hereby given that a gross interim dividend No. 9 of 59.62549 cents per share has been declared in respect of the
six months ended 30 September 2015.
Other information:
- The dividend portion has been declared from income reserves
- A dividend withholding tax of 15% will be applicable on the dividend portion to all shareholders who are not exempt
- The issued share capital at the declaration date is 480 740 038 ordinary shares of no par value
In accordance with Investec Property Fund's status as a REIT, shareholders are advised that the dividend meets the requirements of
a 'qualifying distribution' for the purposes of section 25BB of the Income Tax Act, No. 58 of 1962 (Income Tax Act). The dividends
on the shares will be deemed to be dividends for South African tax purposes in terms of section 25BB of the Income Tax Act.
Tax implications for South African resident shareholders:
Dividends received by or accrued to South African tax residents must be included in the gross income of such shareholders
and will not be exempt from the income tax in terms of the exclusion to the general dividend exemption contained in section
10(1)(k)(i)(aa) of the Income Tax Act because they are dividends distributed by a REIT. These dividends are however exempt from
dividend withholding tax (Dividend Tax) in the hands of South African resident shareholders provided that the South African resident
shareholders have provided to their CSDP or broker, as the case may be, in respect of uncertificated shares, or the Fund, in respect
of certificated shares, a DTD(EX) (Dividend Tax: Declaration and undertaking to be made by the beneficial owner of a share) form to
prove their status as South African residents.
If resident shareholders have not submitted the abovementioned documentation to confirm their status as South African residents,
they are advised to contact their CSDP, or broker, as the case may be, to arrange for the documents to be submitted prior to the
payment of the dividend.
Tax implications for non-resident shareholders
Dividends received by non-resident shareholders from a REIT will not be taxable as income and instead will be treated as ordinary
dividends which are exempt from income tax in terms of the general dividend exemption section 10(1)(k) of the Income Tax Act.
It should be noted that up to 31 December 2013 dividends received by non-residents from a REIT were not subject to Dividend Tax.
With effect from 1 January 2014, any dividend received by a non-resident from a REIT will be subject to Dividend Tax at 15%, unless
the rate is reduced in terms of any applicable agreement for the avoidance of double taxation (DTA) between South Africa and the
country of residence of the non-resident shareholder. Assuming Dividend Tax will be withheld at a rate of 15%, the net amount due
to non-resident shareholders is 50.68167 cents per share. A reduced dividend withholding rate in terms of the applicable DTA may
only be relied on if the non-resident shareholder has provided the following forms to their CSDP or broker, as the case may be, in
respect of uncertificated shares, or the Fund, in respect of certificated shares:
- A declaration that the dividend is subject to a reduced rate as a result of the application of the DTA; and
- A written undertaking to inform the CSDP, or broker or the company, as the case may be, should the circumstances affecting
the reduced rate change or the beneficial owner cease to be the beneficial owner, both in the form prescribed by the
Commissioner of the South African Revenue Services.
If applicable, non-resident shareholders are advised to contact the CSDP, broker or the Fund, as the case may be, to arrange for the
abovementioned documents to be submitted prior to payment of the dividend if such documents have not already been submitted.
Summary of the salient dates relating to the distribution are as follows:
2015
Last day to trade ("LDT") cum dividend Friday, 4 December
Shares to trade ex-dividend Monday, 7 December
Record date Friday, 11 December
Payment date Monday, 14 December
Shares will not be dematerialised or rematerialised between Monday, 7 December 2015 and Friday, 11 December 2015.
By order of the Board
Investec Bank Limited
Company Secretary
19 November 2015
Company Information
Directors
S Hackner (Chairman)#
SR Leon (Deputy Chairman)#
N Riley (Chief Executive Officer)
A Wooler (Financial Director)
LLM Giuricich#
S Mahomed#*
CM Mashaba#*
MM Ngoasheng#*
GR Rosenthal#*
KL Shuenyane#*
# Non-executive
* Independent
Investec Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2008/011366/06)
Share code: IPF ISIN: ZAE000180915
(Income tax reference number 9332/719/16/1)
Registered office
C/o Company Secretarial, Investec Limited
100 Grayston Drive, Sandown, Sandton, 2196
Transfer secretary
Computershare Investor Services (Pty) Limited
(Registration number 2004/003647/07)
Ground Floor, 70 Marshall Street, Johannesburg, 2001
Sponsor
Investec Bank Limited
100 Grayston Drive, Sandown, Sandton, 2196
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