Wrap Text
Final Preliminary Audited Results And Distribution Declaration
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”)
FINAL PRELIMINARY AUDITED RESULTS AND DISTRIBUTION DECLARATION
The directors of Oasis Crescent Property Fund Managers Limited (“OCPFM” or
“the Manager”), the management company of the Fund, present the preliminary
audited results of the Fund for the year ended 31 March 2016 as follows:
Statement of financial position as at 31 March 2016
Audited Audited
2016 2015
R’000 R’000
Assets
Non-current assets 1 020 578 842 520
Investment properties 528 609 453 843
Property, plant and equipment 355 467
Straight-line lease accrual 9 763 8 212
Available-for-sale financial assets 481 851 379 998
Current assets 103 296 88 429
Trade receivables 3 089 2 211
Other receivables 4 923 6 422
Trade receivables from related parties 110 110
Straight-line lease accrual 2 470 2 580
Financial assets at fair value
through profit or loss 84 479 53 414
Other short-term financial assets 6 023 5 194
Cash and cash equivalents 2 202 18 498
Total assets 1 123 874 930 949
Unitholders’ funds and liabilities
Unitholders’ funds 1 083 450 894 737
Capital of the Fund 636 845 542 565
Retained income 8 245 5 375
Other reserves 438 360 346 797
Current liabilities 40 424 36 212
Trade payables 9 040 7 597
Accruals 444 234
Other payables 1 353 1 601
Trade payables to related parties 1 078 701
Unitholders for distribution 28 427 25 173
Non-permissible income available for
dispensation 82 906
Total unitholders’ funds and
liabilities 1 123 874 930 949
Supplemental information
Net asset value (“NAV”) (per unit) 2 101 cents 1 919 cents
Statement of comprehensive income for the year ended 31 March 2016
Audited Audited
2016 2015
R’000 R’000
Income 94 684 84 607
Rental and related income 72 703 65 668
Income from investments excluding non-
permissible income 20 540 16 495
Straight-lining of lease income 1 441 2 444
Expenses 32 967 32 851
Property expenses 27 255 28 165
Service charges 4 493 3 643
Other operating expenses 1 219 1 043
Net income from rentals and
investments 61 717 51 756
Fair value adjustment to investment
properties excluding straight-
lining of lease income 24 994 18 189
Fair value adjustment to investment
properties 26 435 20 633
Straight-lining of lease income (1 441) (2 444)
Operating profit for the year 86 711 69 945
Net non-permissible investment income 338 362
Operating profit including non-permissible
income 87 049 70 307
Non-permissible income dispensed (795) (713)
Net profit for the year 86 254 69 594
Other comprehensive income
Items that may subsequently be
reclassified to profit or loss 65 128 76 096
Fair value gain on available-for-sale
financial assets 65 684 77 115
Realised fair value gain reclassified to
profit or loss (556) (1 019)
Total comprehensive income for
the year 151 381 145 690
Basic earnings per unit (cents) 175.1 152.3
Additional information:
Headline earnings and distributable income
reconciliation
Basic earnings before non-permissible
income adjustment 86 711 69 945
Non-permissible investment income 338 362
Basic Earnings after non-permissible
income adjustment 87 049 70 307
Non-permissible income dispensed (795) (713)
Basic Earnings 86 254 69 594
Adjusted for:
Realised gain on disposal of available-
for-sale financial assets (556) (1 019)
Fair value adjustment to investment
properties (24 994) (18 189)
Headline earnings 60 704 50 386
Less: Fair value adjustments on financial
assets at fair value through profit or
loss (2 155) (1 581)
Less: Fair value adjustments on tenant
deposits (161) (337)
Less: Straight-line lease accrual (1 441) (2 444)
Distribution income excluding non-
permissible income 56 949 46 024
Basic and diluted earnings per unit
(cents) 175.1 152.3
Headline earnings and diluted headline
earnings per unit (cents) 123.2 110.3
Distribution per unit including non-
permissible income (cents) 117.2 102.3
Distribution per unit excluding non-
permissible income (cents) 115.6 100.7
Weighted average units in issue 49 253 281 45 680 697
Units in issue at the end of the year 51 565 907 46 630 486
Statement of changes in unitholders’ funds for the year ended 31 March
2016
Capital
of the Other Retained
Fund Reserves 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 year
ended 31 March 2015 - - 69 594 69 594
Other comprehensive income
Fair value gain on
available-for-sale
financial assets - 76 096 - 76 096
Total comprehensive
income for the year
ended 31 March 2015 - 76 096 69 594 145 690
Issue of units 38 751 - - 38 751
Transaction costs for
issue of new units (173) - - (173)
Transfer to non-
distributable reserve - 20 633 (20 633) -
Distribution received
in advance (676) - 676 -
Distribution to
unitholders - - (46 700) (46 700)
Balance at 31 March 2015 542 565 346 797 5 375 894 737
Net profit for the year
ended 31 March 2016 - - 86 254 86 254
Other comprehensive
income
Fair value gain on
available-for-sale
financial assets - 65 684 - 65 684
Realised gain on disposal
of available for sale
financial assets - (556) - (556)
Total comprehensive
income for the year
ended 31 March 2016 - 65 128 86 254 151 381
Issue of units 52 436 - - 52 436
Units issued for property
acquisitions 42 500 - - 42 500
Transaction costs for
issue of new units (233) - - (233)
Transfer to non-
distributable reserve - 26 435 (26 435) -
Distribution received
in advance (422) - 422 -
Distribution to
unitholders - - (57 371) (57 371)
Balance at 31 March 2016 636 845 438 360 8 245 1 083 450
Distributions declared during the year amounted to 115.6 cents (2015:
100.7 cents) per unit.
Statement of cash flows for the year ended 31 March 2016
Audited Audited
2016 2015
R’000 R’000
Cash flows from operating activities
Net profit for the period 86 254 69 594
Adjusted for:
Non-permissible investment income received (338) (362)
Depreciation 111 109
Provision for receivables impairment (1 473) 2 565
Straight-line lease accrual (1 441) (2 444)
Lease incentives 940 605
Realised gain on sale of financial assets at
fair value through profit or loss (556) (1 019)
Fair value adjustment on financial assets
at fair value through profit or loss (2 316) (1 919)
Fair value adjustment to investment
properties excluding straight-lining of
lease income (24 994) (18 189)
Net operating cash flow before changes in
working capital 56 187 48 940
Decrease/(increase) in current assets
Trade receivables 595 600
Other receivables 1 499 (628)
Trade receivables from related parties - 192
(Decrease)/increase in current liabilities
Trade payables 1 443 197
Accruals 210 (550)
Other payables (248) 75
Trade payables to related parties 377 107
Cash generated from operations 60 063 48 933
Non-permissible investment income received 338 362
Unitholders for distribution (1 680) (2 185)
Non-permissible income (824) 559
Net cash inflow from operating activities 57 897 47 669
Cash flows from investing activities
Acquisition of available-for-sale
financial assets (38 148) (27 499)
Acquisition of financial assets at fair
value through profit or loss (49 171) (30 248)
Acquisition of property, plant and equipment - (245)
Capital expenditure to investment properties (8 054) (9 058)
Lease incentives paid (159) -
Acquisition of short-term financial assets (1 149) (16 008)
Proceeds from disposal of available-for-sale
financial assets 1 979 10 643
Proceeds from disposal of financial assets
at fair value through profit or loss 20 742 30 282
Net cash outflow from investing activities (73 960) (42 133)
Cash flows from financing activities
Transaction cost (233) (173)
Net cash outflow from financing
activities (233) (173)
Net increase/ (decrease) in cash and
cash equivalents (16 296) 5 363
Cash and cash equivalents
At the beginning of the year 18 498 13 135
At the end of the year 2 202 18 498
Segmental information for the year ended 31 March 2016
Indus- Invest- Cor-
Retail Offices trial ments porate Total
R’000 R’000 R’000 R’000 R’000 R’000
Segment revenue
Property income
Rental and
related income 21 553 10 112 22 042 - - 53 707
Recoveries 11 872 3 107 4 017 - - 18 996
Income from
investments
excluding non-
permissible
income
Dividend income
offshore - - - 10 889 - 10 889
Permissible
investment
income -
domestic - - - 6 779 - 6 779
33 425 13 219 26 059 17 668 - 90 371
Segment expense
Property
expenses 18 237 3 697 5 977 - - 27 911
Provision for
receivables impairment 89 262 (1 007) (656)
Service charges - - - - 4 493 4 493
Other operating
expenses - - - 135 1 084 1 219
18 326 3 959 4 970 135 5 577 32 967
Realised gain on
sale of
available-for-
sale financial
assets - - - 556 - 556
Segment result
Operating
profit/(loss) 15 099 9 260 21 089 18 089 (5 577) 57 960
Net finance
income
Interest received - - - - 338 338
NPI Dispensed (457) - - - (338) (795)
Net profit/(loss)
before
straight-line
lease income
and fair value
change to
investment
properties 14 642 9 260 21 089 18 089 (5 577) 57 503
Straight-lining
of lease
income 1 889 6 (454) - - 1 441
Fair value
adjustment to
investment
properties 2 453 11 808 10 733 - - 24 994
Fair value
adjustment to
financial
assets at fair
value through
profit or loss - - - 2 316 - 2 316
Net profit/loss
after straight line
lease income and fair
value change to
investment properties 18 984 21 074 31 368 20 405 (5 577) 86 254
Segment assets
Investment
properties 207 680 117 971 202 957 - - 5528 609
Property, plant
and equipment 327 29 - - - 355
Straight-line
lease accrual
non-current 5 503 - 4 260 - - 9 763
Straight-line
lease accrual
current 492 6 1 972 - - 2 470
Available-for-
sale financial
assets - - - 481 851 - 481 851
Other short term assets 2 901 209 2 913 - - 6 023
Trade receivables 1 972 345 773 - - 3 089
Other receivables 401 - 1 559 2 324 639 4 923
Trade receivables
from related
parties - - - - 110 110
Financial assets
at fair value
through profit
or loss - - - 84 479 - 84 479
Cash and cash
equivalents - - - 2 202 - 2 202
219 275 118 560 214 434 570 856 749 1 123 874
Segment
liabilities
Trade payables 4 819 439 3 782 - - 9 040
Accruals 21 7 33 - 383 444
Other payables 584 - 251 - 518 1 353
Trade payables
to related
parties 95 1 73 38 870 1 078
Unitholders for
distribution - - - - 28 427 28 427
Non-permissible - - - - 82 82
income
available for
dispensation
5 519 447 4 139 38 30 281 40 424
Net current segment
assets/(liabilities) 246 113 3 078 88 967 (29 532) 62 872
Capital
expenditure 7 446 37 571 - - 8 054
Segmental information for the year ended 31 March 2015
Indus- Invest- Cor-
Retail Offices trial ments porate Total
R’000 R’000 R’000 R’000 R’000 R’000
Segment revenue
Property income
Rental and
related income 18 731 9 490 19985 - - 48 206
Recoveries 10 290 3 446 3 726 17 462
Income from
investments
excluding non-
permissible
income
Dividend income
offshore - - - 9 838 - 9 838
Permissible
investment
income -
domestic - - - 3 720 - 3 720
29 021 12 936 23 711 13 558 - 79 226
Segment expense
Property
expenses 15 940 4 369 5 291 - 25 600
Provision for
receivable
impairment 328 - 2 238 - - 2 565
Service charges - - - - 3 643 3 643
Other operating
expenses - - - - 1 043 1 043
16 268 4 369 7 528 - 4 686 32 851
Realised gain on
available-for-
sale financial
assets - - - 1 019 - 1 019
Segment result
Operating
profit/(loss) 12 753 8 567 16 183 14 577 (4 686) 47 394
Net finance
income
Interest received - - - - 362 362
NPI dispensed (351) - - - (362) (713)
Net profit/(loss)
before
straight-line
lease income
and fair value
change to
investment
properties 12 402 8 567 16 183 14 577 (4 686) 47 043
Straight-lining
of lease
income 1 151 - 1 293 - - 2 444
Fair value
adjustment to
investment
properties 3 438 1 402 13 349 - - 18 189
Fair value
adjustment to
financial
assets at fair
value through
profit or loss - - - 1 918 - 1 918
Net profit/(loss)
after
straight-line
lease income
and fair
value change
to investment
properties 16 991 9 969 30 825 16 495 (4 686) 69 594
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
assets 2 556 - 2 638 - - 5 194
Trade receivables 1 445 326 440 - - 2 211
Other receivables 335 - 1 971 3 526 590 6 422
Trade receivables
from related parties - - - - 110 110
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
Distribution 25 173 25 173
Non-permissible
income
available for
dispensation - - - - 906 906
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 5 166 384 3 508 - - 9 058
Commentary
Basis of preparation and accounting policies
The preliminary financial statements are prepared in accordance with the
requirements of the JSE Limited’s “Listings Requirements” for preliminary
reports. The Listings Requirements require preliminary 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 and the Collective Investment Schemes
Control Act of 2002. The accounting policies applied in the preparation of
the financial statements from which the preliminary financial statements
were derived are in terms of International Financial Reporting Standards and
are consistent with those accounting policies applied in the preparation of
the previous annual financial statements.
The non-permissible income is dispensed to the Oasis Crescent Fund Trust
which is a registered public benefit organisation. The accounting policies
are consistent with those applied in the most recent annual financial
statements of the Fund.
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.
PricewaterhouseCoopers Inc. has audited the financial information set out
in this report. Their unqualified audit report is available for inspection
at the Fund’s registered office.
These preliminary audited results were compiled by Michael Swingler CA(SA).
Any reference to the future financial performance of the Fund contained in
this announcement has not been reviewed or reported on by the Fund’s
auditors.
Financial highlights
Distribution per unit (excluding non-permissible income) increased by
14.8% to 115.6 cents per unit (FY2015: 100.7 cents)
Net Asset Value per unit increased by 9.5% to 2 101 cents per unit
(FY2015: 1 919 cents)
Intrinsic value return of 14.4% per annum since inception compared to
inflation of 6.0% per annum
2016 2015
Distribution per unit including non-permissible
income (cents) 117.2 102.3
Distribution per unit excluding non-permissible
income (cents) 115.6 100.7
Property portfolio valuation(Rm) 541 465
Investment in Offshore Listed Properties (Rm) 421 345
Investments in Local Listed Properties and other
current assets(Rm) 162 121
Net asset value per unit (cents) 2 101 1 919
Listed market price at year end (cents) 1 950 1 750
Movement in investment properties:
Carrying value at the beginning of the year 453 843 427 201
Acquisitions during the period 42 500 -
Subsequent capitalised expenditure 8 054 9 058
Movement in lease incentives (782) (605)
Fair value adjustment to investment properties
excluding straight-lining of lease income 24 994 18 189
Revaluation 26 435 20 633
Change in straight-line lease accrual (1 441) (2 444)
Carrying value at the end of the year 528 609 453 843
The valuation of investment properties include bulk sales, 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 2016 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 7.50% and 10.25% (2015: 6.75% 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.
Fair value estimation:
Effective 1 April 2013, the Fund adopted IFRS 13 for financial instruments
that are measured in the statement of financial position at fair value
which requires disclosure of fair value measurements by level of the
following fair value measurement hierarchy:
- Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1).
- Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (level 2).
- Inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs) (level 3).
The following table presents the Fund's assets and liabilities that are
measured at fair value at 31 March 2016:
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 - 420 545 - 420 545
Investment in listed property
funds 61 306 - - 61 306
Financial assets at fair value
through profit or loss
Investment in Oasis Crescent
Income Fund - 84 479 - 84 479
Other short-term financial assets - 6 023 - 6 023
Investment property
Investment property - - 528 609 528 609
The following table presents the Fund's assets and liabilities 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
Investment property - - 453 843 453 843
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 comprises 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 bid
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 Ltd., the management company of the fund. These
investments are not actively traded on an exchange and are therefore not
classified as Level 1.
INTRODUCTION
The Oasis Crescent Property Fund is a well-diversified Real Estate Investment
Trust (“REIT”) invested in South African direct and listed property
investments and high quality global listed REITS. 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 Net Asset Value 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 13.9% relative to annualised inflation of 6.0% since
inception, outperforming inflation by an average of 7.9% per annum. Your
Fund’s annualised total intrinsic value return is 14.4% per annum since
inception.
Cumulative returns Since FY2016 FY2015 FY2014 FY2013 FY2012
Inception
Unitholder return 286.3 286.3 227.3 165.3 125.9 104.2
Intrinsic value 302.8 302.8 248.7 194.6 161.0 124.1
return
Inflation 83.7 83.7 71.7 65.2 56.0 47.3
Annual Returns Since
Inception FY2016 FY2015 FY2014 FY2013 FY2012
Unitholder return 13.9 18.0 23.4 17.4 10.7 7.8
Intrinsic value 14.4 15.5 18.4 12.9 16.4 11.2
return
Inflation 6.0 7.0 3.9 5.9 5.9 6.0
Market Price 1 950 1 750 1 500 1 350 1 300
NAV 2 101 1 919 1 706 1 587 1 439
MARKET OVERVIEW
In global property markets, the US rental growth and occupancy recovery remains
ahead of the other major developed markets. The level of new supply in
developed property markets is low while funding continues to be a limitation
for speculative development. Global REIT debt levels are well below their 2008
peaks and the average debt maturity has increased. The current global REIT DY
to 10yr bond yield spreads are above their long term averages. REITS with a
high exposure to the major global cities, positive secular demand drivers,
enhancing refurbishments / developments and superior balance sheets are well
positioned to outperform as bond yields normalise.
In a more challenging environment for the South African consumer, shopping
centres that are appealing destinations, are close to the major cities or
offer convenience are better positioned to grow trading density and rentals.
Demand in the office sector is dependent on employment and business confidence
which will take time to recover. The new supply in the Gauteng market creates
an increasing vacancy and rental risk for B and C grade office properties.
Supply in the industrial sector remains low due to the limited availability
of serviced land while demand is driven by companies looking to improve the
efficiency of their supply chain and provide goods to their customers through
various sales channels.
PORTFOLIO OVERVIEW
FY2016 FY2015 FY2014
R'mil % R'mil % R'mil %
Direct Property 541 48 465 50 436 55
Global Investments 421 37 345 37 267 34
Cash, SA
Investments and
other 162 15 121 13 84 11
Total Assets 1 124 100 931 100 787 100
The Fund has focused on building a portfolio with a combination of high quality
direct property investments and global listed REITS 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 with 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 REITS 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 by 14.8% to 115.6 cents per unit (FY2015:
100.7 cents)
Net Asset Value per unit increased by 9.5% to 2 101 cents per unit (FY2015: 1
919 cents)
Intrinsic value return of 14.4% per annum since inception compared to inflation
of 6.0% per annum
FY2016 FY2015 FY2014
Distribution per unit including non-
permissible income (cents) 117.2 102.3 87.2
Distribution per unit excluding non-
permissible income (cents) 115.6 100.7 85.1
Property portfolio valuation (R’mil) 541 465 436
Investments in offshore listed
Properties (R’mil) 421 345 267
Investments in Local Listed
Properties and other current assets
(R’mil) 76 44 30
Cash and cash equivalents (R mil) 86 77 54
Net asset value per unit (cents) 2 101 1 919 1 706
Listed market price at year end
(cents) 1 950 1 750 1 500
FY2016 FY2015 FY2014 2016/2015 2016/2014
%
(R'000) (R'000) (R'000) % annualised
Direct
property net
income 44 990 37 153 30 479 21 21
Global
Investment
Income 10 889 9 838 7 426 11 21
Cash and Local
Investment
Income 6 646 3 720 3 410 79 40
Shared expense (5 576) (4 686) (3 744) 19 22
Distributable
Income excl
NPI 56 949 46 024 37 571 24 23
During the period, the Fund benefitted from the active asset management,
successful refurbishments, filling of vacancies and property acquisitions
which resulted in solid growth in rentals and property expense recoveries.
The acquisition of 24 Milner Road and 265 Victoria Road contributed 3% towards
the increase in direct property net income while the addition of the national
drive-throughs contributed an additional 2% towards the increase in direct
property net income. Filling of vacancies contributed 4% towards the increase
in direct property income with escalations contributing a further 7%. The
recovery of debtors previously provided for contributed 4% to the increase in
direct property net income.
The investment income earned from the global investments benefited from the
weaker Rand while the 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 as well as the two properties acquired through
the issue of units. The Fund continues to focus on renewing leases coming up
for expiry and further improvements in the quality of the tenant mix.
Revenue Revenue
Rentable Area FY2016 FY2015
Area (m²) % (R'mil) % (R'mil) %
Western Cape 79 545 83 44.9 61 40.3 61
KwaZulu-Natal 16 407 17 28.7 39 26.0 39
Total - Direct Property (excl
straight lining) 95 952 100 73.6 100 66.3 100
Note: Revenue includes recoveries and excludes leasing incentives
Segmental Profile
FY2016 FY2015
Average Average Average Average
rental per rental rental per rental
Segment Rentable area
m² for the escalatio m² for the escalation
period n per period per
(m²) (m²) (m²) (%) (m²) (m²) (%)
Retail 20 936 114 8 117 8
Office 7 429 113 8 125 9
Industri
al 67 587 28 8 26 8
TOTAL 95 952
Vacancy Profile
% of total rentable area FY2016 FY2015
Retail 0.8 1.7
Office 0.0 0.0
Industrial 0.0 0.0
Note: This relates only to the Direct Property Portfolio
Lease expiry profile
FY 2016 FY2015
Rental Area Revenue Rental Area Revenue
% % % %
- Within 1 year 57 52 29 43
- Within 2 year 4 6 34 23
- Within 3 year 5 9 3 3
- Within 4 year 1 2 1 3
- Within 5 year or more
years 33 31 33 28
100 100 100 100
Tenant Profile
FY 2016 FY2015
(%) (%)
A - Large Nationals, large listed, large franchisees,
multi-nationals and government 67 72
B - Nationals, listed, franchisees and medium to large
professional firms 17 18
C - Other 16 10
TOTAL 100 100
Note: 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 REITS provide geographic and
sector diversification. 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 1.9% and 1.1% 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 remains focused on addressing the lease expiry profile through
strategically renewing leases of high quality tenants and improving the tenant
mix where necessary. Expiries also provide opportunities to strategically
refurbish properties and enhance tenant mix. The accumulated cash and liquid
reserves provide the flexibility to take advantage of opportunities. Post
year-end the Fund has acquired a property in the Western Cape being 364
Victoria Road for R23 million, which will form part of the retail and office
segments. This property has location advantages and development potential.
The global investments will continue to provide diversification benefits to
investors and will remain a unique characteristic of the Fund. Management is
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 R1.25 million (FY2015: R1.11
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 R4.49 million (FY2015:
R3.64 million)
Units in issue
As at 31 March 2016 the number of units in issue was 51,565,907 (FY2015:
46,630,486)
Unitholders' holding more than 5% of issued units as at 31
March 2016:
NUMBER OF HOLDING
NAME UNITS (%)
Oasis Crescent Balanced Progressive
Fund of Funds 6 669 699.00 12.9
Oasis Crescent Property Company
(Pty) Ltd 5 278 304.00 10.2
Oasis Crescent Pension Annuity
Stable Fund 4 474 890.00 8.7
Oasis Crescent Balanced Stable Fund
of Funds 4 109 721.00 8.0
Oasis Crescent Retirement Annuity
High Equity Fund 3 424 640.00 6.6
BNP Paribas Securities 3 029 526.00 5.9
Oasis Crescent Income Fund 2 566 295.00 5.0
Oasis Crescent Equity Fund 2 563 972.00 5.0
Total 32 117 047.00 62.3
Shareholding in OCPFM
OCPFM is 100% owned by Oasis Group Holdings (Proprietary) Limited
Related party transactions and balances
Oasis Crescent Property Fund Managers Limited is the management company of
the Fund in terms of the Collective Investment Schemes Control Act.
Oasis Group Holdings (Proprietary) Limited is a tenant at The
Ridge@Shallcross as well as 24 Milner Road and the parent of Oasis Crescent
Property Fund Managers Limited.
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 the Fund.
As disclosed in the prospectus of Oasis Crescent Income Fund, no management
fee is charged for investing in the Oasis Crescent Income Fund by Oasis
Crescent Management Company Limited, the manager of the Fund.
Abli Property Developers (Pty) Ltd. renders property development consulting
services to the Fund on capital development projects.
Oasis Asset Managers renders investment management services to the Fund on
Available-for-sale financial assets.
There are common directors to Oasis Crescent Property Fund Managers Limited,
Oasis Group Holdings (Pty) Ltd., Oasis Global Management Company (Ireland)
Limited, Oasis Crescent Management Company Limited, Oasis Asset Management
and Abli Property Developers (Pty) Ltd. Transactions with related parties
are executed on terms no less favourable 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 Oasis Crescent Property Fund Managers Limited.
Related party transactions
2016 2015
R’000 R’000
Service charge paid to Oasis Crescent Property Fund
Managers Limited 4 493 3 643
Property management fees paid to Oasis Crescent
Property Fund Managers Limited 1 251 1 112
Rental and related income from Oasis Group
Holdings (Proprietary) Limited at The
Ridge@Shallcross 467 413
Rental and related income from Oasis Group
Holdings (Proprietary) Limited at 24
Milner Road 275 -
Consulting fees paid to Abli Property Developers
(Proprietary) Limited for consulting services on
capital projects 186 197
Investment management fees paid to Oasis
Asset Management 135 -
Related party balances
Trade receivables from Oasis Group Holdings
(Proprietary) Limited 110 110
Trade payables to Oasis Crescent Property Fund
Managers Limited (873) (658)
Trade payables to Oasis Group Holdings (Proprietary)
Limited (154) (39)
Trade payables to Oasis Asset Management (38) -
Trade payables to Abli Property Developers
(Proprietary) Limited (12) (4)
The Fund issued 2 296 056 new units as consideration for the acquisition of
two properties, 24 Milner Road and 265 Victoria Road. 1 296 596 new units
were issued to Oasis Crescent Fund Trust in consideration for 265 Victoria
Road at an issue price of 1 851 cents per unit and 999 460 new units were
issued to Oasis Crescent Property Company (Proprietary) Limited in
consideration for 24 Milner Road at an issue price of 1 851 cents per unit.
Declaration announcement in respect of distribution for the 6 months ended
31 March 2016
Notice is hereby given that a distribution for the six-month period ended
31 March 2016 has been approved and declared of 5 504.971 cents (in
aggregate), after non-permissible income, for every 100 (one hundred) units
so held, to unitholders recorded in the register of the Fund at 12:00pm on
Friday, 10 June 2016. Unitholders may elect to receive the distribution in
cash or to reinvest the distribution by the purchase of new units at a rate
of 2.621 units at 2 101 cents per unit (in aggregate), for every 100 (one
hundred) units so held.
Unitholders should take note of the corporate timetable as set out below in
respect of the abovementioned distribution and the election in terms thereof.
SALIENT DATES AND TIMES 2016
Declaration announcement on SENS of distribution Tuesday, 3 May
and right of election to purchase new units or
receive a cash payment
Finalisation announcement on SENS in respect of Friday, 20 May
distribution and right of election to purchase
new units or receive a cash payment
Circular and form of election posted to Friday, 20 May
unitholders
Last day to trade in order to be eligible for the Friday, 3 June
distribution
Trading commences ex- entitlement to the Monday, 6 June
distribution
Listing of maximum possible number of units that Wednesday, 8 June
may be purchased at commencement of trade on
Closing date for the election of cash Friday, 10 June
distribution at 12:00 pm on
Record date for the distribution Friday, 10 June
Cash distribution cheques posted and CSDP/broker Monday, 13 June
accounts updated with cash
Announcement of the results of the distribution Monday, 13 June
on SENS
Unit certificates posted and CSDP/broker accounts Wednesday, 15 June
updated with units
Adjustment of number of new units listed on or Friday, 17 June
about
Notes:
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, 6
June 2016 and Friday, 10 June 2016, both days inclusive.
3. The above dates and times are subject to change. Any changes will be
announced on SENS.
4. All times quoted in this circular 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 used to purchase additional units.
Tax implications
For taxation purposes, OCPF is a REIT as defined in the Income Tax Act as
from 01 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-residents 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 residence of the shareholder. 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% for non-resident unitholders:
- the reinvestment ratio for non-resident unitholders will be 2.22785
units at 2,101 cents per unit, for every 100 (one hundred) units held
on the record date;
- should such unitholders elect to receive the distribution in cash, they
will receive 4,679.225 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.
A circular will be posted out to unitholders on or about Friday, 20 May
2016, in respect of the unit and income distribution.
English copies of this circular and form of election are available at the
offices of OCPF’s designated adviser, PSG Capital Proprietary Limited, at
the addresses set out in the Corporate Information section and at the office
of OCPF, 96 Upper Roodebloem Road, University Estate, Cape Town, during
normal business hours from Friday, 20 May 2016 until Friday, 10 June 2016.
The number of units in issue at the date of the aforesaid distribution is
51 565 907. The income tax reference number of the Fund is 3354212148.
By order of the board
Oasis Crescent Property Fund Managers Limited
Cape Town
3 May 2016
Designated Adviser
PSG Capital (Proprietary) Limited
Date: 03/05/2016 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.