Wrap Text
Summarised Consolidated Results and Cash Dividend Declaration for the six months ended 31 December 2017
FAIRVEST PROPERTY HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/005011/06)
("Fairvest" or "the company" or "the group")
Share code: FVT ISIN: ZAE0000203808
Granted REIT status with the JSE
SUMMARISED CONSOLIDATED RESULTS AND CASH DIVIDEND DECLARATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
HIGHLIGHTS
LIKE FOR LIKE NET ASSET VALUE
DISTRIBUTION FOR TOTAL PROPERTY ANNUALISED NET INCREASED BY
THE PERIOD INCREASED BY PORTFOLIO INCREASED BY PROPERTY INCOME 2.8% to
9.53% per share 27.1% INCREASED BY 224.19 cents per share
TO 9.806 cents TO R2.8 billion 11.8%
VACANCIES REDUCED TO MAINTAINED ARREARS AT TENANT RETENTION DISTRIBUTION GROWTH OF
3.2% 2.4% REMAIN HIGH AT 9% to 10%
OF TOTAL LETTABLE AREA OF REVENUE 88.5% FOR THE YEAR ENDED
30 JUNE 2018 EXPECTED
SUMMARISED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited Unaudited Audited
31 Dec 31 Dec 30 Jun
2017 2016 2017
R'000 R'000 R'000
ASSETS
NON-CURRENT ASSETS 2 996 190 2 137 887 2 263 812
Investment property 2 750 636 2 041 370 2 157 747
Investment property under development 31 242 - -
Loans receivable 167 237 57 255 61 603
Investments 2 196 2 115 2 154
Office equipment 345 414 343
Operating lease asset 44 534 36 733 41 965
CURRENT ASSETS 66 430 35 833 54 110
Loans receivables 5 362 1 482 5 476
Trade and other receivables 46 860 25 727 36 000
Cash and cash equivalents 14 208 8 624 12 634
TOTAL ASSETS 3 062 620 2 173 720 2 317 922
EQUITY AND LIABILITIES
SHAREHOLDERS' INTEREST 1 930 436 1 603 058 1 723 218
Share capital 465 353 310 619 327 951
Retained earnings 1 465 083 1 292 439 1 395 267
Non-controlling interest 90 414 1 287 4 454
TOTAL EQUITY 2 020 850 1 604 345 1 727 672
NON-CURRENT LIABILITIES 590 063 513 703 309 366
Interest-bearing borrowings 531 866 477 110 272 339
Amounts owing to minorities 44 010 24 720 23 756
Derivative financial instrument 4 279 3 080 4 404
Other non-current liabilities 9 405 8 182 8 395
Deferred taxation 503 611 472
CURRENT LIABILITIES 451 707 55 672 280 884
Interest-bearing borrowings 398 098 6 017 224 652
Trade and other payables 53 609 49 655 56 232
TOTAL EQUITY AND LIABILITIES 3 062 620 2 173 720 2 317 922
SUMMARISED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
six months six months 12 months
to 31 Dec to 31 Dec to 30 Jun
2017 2016 2017
R'000 R'000 R'000
GROSS REVENUE 186 878 162 204 331 142
Rental income - contractual 183 071 157 416 320 431
- straight-line accrual 3 807 4 788 10 711
Property expenses (66 562) (59 198) (121 690)
Net profit from property operations 120 316 103 006 209 452
Corporate administrative expenses (11 323) (9 848) (19 393)
OPERATING PROFIT 108 993 93 158 190 059
Fair value adjustment to investment
properties 69 132 61 915 159 348
Fair value adjustment to derivatives 125 (1 135) (2 459)
Fair value adjustment to investments 42 51 90
Finance cost (32 589) (29 476) (53 091)
Investment revenue 6 730 3 164 9 420
PROFIT BEFORE CAPITAL EXPENSES 152 433 127 677 303 367
Capital expenses (4 260) (557) (557)
PROFIT BEFORE TAXATION 148 173 127 120 302 810
Taxation (22) (330) (191)
COMPREHENSIVE INCOME
ATTRIBUTABLE TO SHAREHOLDERS 148 151 126 790 302 619
Profit and total comprehensive
income attributable to:
- Owners of the parent 143 901 126 574 299 234
- Non-controlling interest 4 250 216 3 385
148 151 126 790 302 619
Reconciliation between profit
attributable to shareholders,
distributable earnings and headline
earnings per share
Comprehensive income attributable to
owners of the parent 143 901 126 574 299 234
Fair value adjustment to investment
properties (attributable to owners of
the parent) (66 086) (61 159) (157 283)
Headline profit
attributable to shareholders 77 815 65 415 141 951
Distributable earnings calculation
Net profit from property operations 120 316 103 006 209 452
Straight-line rental income accrual (3 807) (4 788) (10 711)
Corporate administrative expenses (11 323) (9 848) (19 393)
Finance cost (31 072) (29 201) (52 673)
Investment revenue 6 730 3 164 9 420
Share issued cum distribution 4 249 7 717 8 267
Non-controlling interest share of
distribution (654) (216) (443)
Distributable earnings 84 439 69 834 143 919
Distribution 84 439 69 834 143 919
DISTRIBUTION (Dividend)
Interim dividend per share (cents) 9.806 8.953 8.953
Final dividend declaration per share
(cents) - - 9.380
Total distribution per share (cents) 9.806 8.953 18.333
EARNINGS PER SHARE
Basic and diluted earnings per share
(cents) 17.66 18.26 40.53
Headline and diluted headline earnings
per share (cents) 9.55 9.43 19.23
Net asset value per share (cents) 224.19 205.52 218.18
Share statistics
Shares in issue 861 100 145 780 010 521 789 836 312
Treasury shares (12 067) - (12 067)
Effective shares in issue 861 088 078 780 010 521 789 824 245
Weighted average number of shares 814 665 426 693 363 896 738 319 633
CONDENSED CONSOLIDATED SEGMENT REPORT
Reconciling
KwaZulu Western Northern Eastern items/
Natal Cape Gauteng Free State Cape Limpopo Cape Mpumalanga (Eliminations) Total
FOR THE SIX MONTHS ENDED
31 DECEMBER 2017
Revenue - external customers 49 290 36 798 24 736 27 432 19 586 10 143 10 495 4 591 - 183 071
Operating profit 34 913 22 526 18 012 17 039 10 516 6 443 7 907 2 960 (11 323) 108 993
Total assets 803 880 512 910 669 654 316 970 207 825 135 992 148 284 64 904 202 201* 3 062 620
FOR THE SIX MONTHS ENDED
31 DECEMBER 2016
Revenue - external customers 34 626 31 246 22 180 25 424 17 776 9 928 11 206 5 030 - 157 416
Operating profit 27 242 21 726 11 771 14 904 9 076 6 501 8 719 3 067 (9 848) 93 158
Total assets 568 620 445 559 279 645 294 012 185 010 126 430 136 850 64 114 73 480 2 173 720
FOR THE YEAR ENDED 30 JUNE 2017
Revenue - external customers 70 689 66 944 44 794 47 737 37 415 20 089 21 191 11 572 - 320 431
Operating profit 56 307 45 265 24 713 27 208 19 845 14 045 16 144 5 925 (19 393) 190 059
Total assets 603 980 477 613 296 230 311 473 200 229 131 543 142 918 63 940 89 996 2 317 922
* Corporate assets not allocated to a segment.
SUMMARISED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited Unaudited Audited
six months six months 12 months
to 31 Dec to 31 Dec to 30 Jun
2017 2016 2017
R'000 R'000 R'000
Cash generated from operations 91 981 103 142 182 446
Finance costs (26 283) (28 490) (50 786)
Investment income 971 1 564 1 631
Dividend paid (74 370) (55 656) (125 136)
Cash (outflow)/inflow from
operating activities (7 701) 20 560 8 155
Acquisitions of and improvements
to investment properties (202 426) (129 630) (151 265)
Development costs capitalised (31 703) - -
Acquisition of subsidiary (81 554) - -
Office equipment acquired (65) 11 -
Cash outflow to investing activities (315 748) (129 619) (151 265)
Interest-bearing borrowings
advanced/(repaid) 268 441 (92 085) (78 004)
Amounts owing to minorities raised 18 941 442 8 291
Advances to loans receivable (99 761) (5 877) (7 078)
Proceeds from issue of shares 137 402 205 287 222 642
Acquisition of treasury shares - - (23)
Cash inflow from financing activities 325 023 107 767 145 828
Net increase/(decrease) in cash and
cash equivalents 1 574 (1 292) 2 718
Cash and cash equivalents at
beginning of period 12 634 9 916 9 916
Cash and cash equivalents at
end of period 14 208 8 624 12 634
SUMMARISED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Non-
Share Retained Shareholders' controlling Total
capital earnings interest interest Equity
R'000 R'000 R'000 R'000 R'000
Balance at 1 July 2016 105 332 1 221 747 1 327 079 1 081 1 328 160
Shares issued 206 677 - 206 677 - 206 677
Capital issue expenses (1 390) - (1 390) - (1 390)
Total comprehensive income
for the period - 126 574 126 574 216 126 790
Dividends paid and declared - (55 882) (55 882) (10) (55 892)
Balance at 31 December 2016 310 619 1 292 439 1 603 058 1 287 1 604 345
Shares issued 17 817 - 17 817 - 17 817
Capital issue expenses (462) - (462) - (462)
Acquisition of treasury shares (23) - (23) - (23)
Total comprehensive income
for the period - 172 660 172 660 3 169 175 829
Dividends paid and declared - (69 832) (69 832) (2) (69 834)
Balance at 30 June 2017 327 951 1 395 267 1 723 218 4 454 1 727 672
Shares issued 138 423 - 138 423 - 138 423
Capital issue expenses (1 021) - (1 021) - (1 021)
Acquisition of subsidiary - - - 82 154 82 154
Total comprehensive income
for the period - 143 901 143 901 4 250 148 151
Dividends paid and declared - (74 085) (74 085) (444) (74 529)
Balance at 31 December 2017 465 353 1 465 083 1 930 436 90 414 2 020 850
OTHER SEGMENTAL INFORMATION
Unaudited Unaudited Audited
31 Dec 31 Dec 30 Jun
2017 2016 2017
Regional profile based on lettable area
KwaZulu-Natal 24.9% 22.5% 22.4%
Gauteng 22.4% 15.5% 15.5%
Western Cape 17.9% 20.6% 20.9%
Free State 13.1% 15.5% 15.4%
Northern Cape 7.6% 9.2% 9.2%
Eastern Cape 7.1% 8.4% 8.3%
Limpopo 5.0% 5.9% 5.9%
Mpumalanga 2.0% 2.4% 2.4%
Vacancy profile based on gross
lettable area
Gross lettable area in metres squared
as at end of period 229 175 193 580 194 311
Properties held 43 41 41
Vacant area in metres squared 7 245 7 844 9 094
Vacant area as % of gross lettable area 3.2% 4.1% 4.7%
Regional vacancy profile (m2)
(regions where vacancies are located)
Gauteng 3 096 1 642 2 327
Free State 1 683 1 022 2 425
KwaZulu-Natal 1 108 1 462 1 467
Western Cape 601 2 591 1 690
Northern Cape 542 87 483
Mpumalanga 160 - 50
Limpopo 50 1 040 652
Eastern Cape 6 - -
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The preparation of these summarised consolidated financial statements was supervised by the Chief Financial Officer,
BJ Kriel CA(SA).
The accounting policies applied in the preparation of these summarised consolidated results for the six months ended 31 December
2017, which are based on reasonable judgements and estimates, are in accordance with International Financial Reporting Standards
("IFRS") and are consistent with those applied in the annual financial statements for the year ended 30 June 2017. Any other new
and amendments to IFRS and IFRIC interpretations did not impact on the financial position or performance of the company but has
resulted in additional disclosures. These summarised consolidated results, as set out in this report, have been prepared in accordance
and containing the information required by IAS 34 - Interim Financial Reporting, the SAICA Financial Reporting Guidelines as issued
by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Council, the
Companies Act of South Africa, No 71 of 2008, as amended ("Companies Act") and the Listings Requirements of JSE Limited.
In terms of IAS 39: Financial Instruments: Recognition and measurement and IFRS 7, the group's interest rate derivatives are measured
at fair value through profit or loss and are categorised as level 2 investments. Interest rate derivatives are valued using discounted
cash flow techniques and observable market interest rates off the interest rate yield curve. There were no transfers between levels
1, 2 and 3 during the period. The valuation methods applied are consistent with those applied in preparing the annual consolidated
financial statements.
The revaluation of investment property requires judgement in the determination of future cash flows from leases. An appropriate
capitalisation rate which varies between 9.0% and 11.0%, with a discount rate of between 14.0% and 16.0% was used.
Changes in the capitalisation and discount rates are attributable to changes in market conditions and can have a significant impact
on the property valuations. A 25 basis points decrease in the capitalisation rate will increase the value of investment property by
R45.3 million. A 25 basis points increase in the discount rate will decrease the value of investment property by R27.9 million.
These summarised consolidated results for the six months ended 31 December 2017 have been prepared in accordance with the
historic cost basis, except for the measurement of investment properties and certain financial assets and financial liabilities which
are stated at fair value.
The financial results are presented in Rands, which is Fairvest's functional and presentation currency and have been prepared on a
going-concern basis.
These summarised consolidated financial results have not been reviewed or audited by the company's auditors BDO South Africa Inc.
ESTIMATES AND CRITICAL JUDGEMENTS
Except for the measurement of investment properties, and certain financial assets and financial liabilities, the financial statements do
not include any material estimates.
BUSINESS COMBINATION
Shareholders are referred to the detailed SENS announcement on 19 December 2017 regarding the subscription of shares by the company in
Bara Precinct Proprietary Limited ("Bara Precinct"). On 18 December 2017, the company subscribed for 50.17% of the shares in Bara Precinct,
obtaining control and Bara Precinct became a subsidiary of the company.
Bara Precinct owns five and leases two immovable properties in Diepkloof, Soweto. The transaction is in line with Fairvest's strategy of
acquiring assets servicing the lower living standards measure (LSM) market, located in non-metropolitan areas, as well as rural, convenience
and community shopping centres located in high-growth nodes, close to commuter networks, with a view to providing shareholders with attractive
returns and distinctive, diversified opportunities.
The subscription consideration to the value of R82.5 million was cash paid on 18 December 2017.
Assets acquired and liabilities assumed
The fair values of the identifiable assets and liabilities of Bara Precinct at the date of acquisition were:
Fair value at
acquisition
R'000
ASSETS
Investment property 322 435
Trade and other receivables 181
Cash and cash equivalents 983
TOTAL ASSETS 323 599
LIABILITIES
Interest-bearing borrowings 157 698
Trade and other payables 1 210
TOTAL LIABILITIES 158 908
Total identifiable net asset value 164 691
Non-controlling interest (82 154)
Goodwill -
Subscription consideration paid 18 December 2017 in cash 82 537
Cash flow on acquisition
Net cash acquired with subsidiary 983
Cash paid (82 537)
Net cash outflow on acquisition (81 554)
The initial accounting for this acquisition has been reported on a provisional basis and will be finalised before 30 June 2018.
Transaction costs of R4.9 million were incurred on the acquisition and have been reflected in the statement of comprehensive income.
The fair value of the investment properties and the non-controlling interest at acquisition were calculated utilising the capitalisation
rate method.
From the date of acquisition, the Bara Precinct transaction contributed R1.4 million to contractual rental income and R5.5 million to the
comprehensive income attributable to shareholders. If the acquisition had taken place at the beginning of the period, rental income would
have been R17.3 million and comprehensive income attributable to shareholders for the group would have been R7.3 million for the six-month period.
COMMENTARY
INTRODUCTION
Fairvest is a Real Estate Investment Trust ("REIT"), with a unique focus on retail assets weighted predominantly toward non-
metropolitan and rural shopping centres, as well as convenience and community shopping centres servicing the lower LSM market,
in high-growth nodes, close to commuter networks. The Fairvest property portfolio consists of 43 properties, with 229 175m2 of
lettable area and valued at R2.80 billion.
REVIEW OF RESULTS
Fairvest board of directors are pleased to announce an interim dividend distribution of 9.806 cents per share for the six months ended
31 December 2017, which is a 9.53% increase from the previous period, again maintaining distribution growth within the guidance,
issued of 9% to 10%.
Distribution history Interim Final Total
Jun-14 6.750 6.970 13.720
Jun-15 7.427 7.679 15.106
Jun-16 8.171 8.489 16.660
Jun-17 8.953 9.380 18.333
Jun-18 9.806
Revenue increased by 15.2% to R186.9 million, the result of income growth in the historic portfolio as well as the acquisitions during
the period. Net profit from property operations increased by 16.8% to R120.3 million, while corporate administration expenses
increased by 15.0% to R11.3 million. Distributable earnings increased by 20.9% to R84.4 million.
A strong focus remains on cost containment and efficient recoveries of municipal charges, which improved the net property
expense ratio (expenses net of utility recoveries) to 13.7% compared to 15.5% for the previous financial year. Certain municipal
expenses provided for in previous financial years, where actual charges were lower than anticipated, also contributed to the pleasing
improvement. Gross cost to income ratio reduced from 37.6% to 36.2%. Like for like annualised net property income increased by
11.8% compared to the previous period.
Gross rentals across the portfolio trended upwards, with a 6.2% increase in the weighted average rental to R110.46/m2 at
31 December 2017 compared to R103.99/m2 at 30 June 2017, with the weighted average retail rental at R108.92/m2. The weighted
average contractual escalation for the portfolio increased marginally from 7.4% as at 30 June 2017 to 7.5% at 31 December 2017.
A strong focus on arrears management assisted to keep arrears low at 2.4% of revenue.
The net asset value increased by 12.0% to R1.93 billion compared to R1.72 billion at 30 June 2017. On a per share basis, this equates
to 224.19 cents per share, or an increase of 2.8%.
Net
Market Net asset assetvalue
capitalisation value per share
Net asset value and market capitalisation R'million R'million (cents)
Jun-14 733.4 838.9 159.00
Jun-15 1 079.0 1 105.4 184.40
Jun-16 1 020.3 1 327.1 201.60
Jun-17 1 540.2 1 723.2 218.18
Dec-17 1 636.1 1 930.4 224.19
PROPERTY PORTFOLIO
The total property portfolio increased by 27.1% from R2.20 billion at 30 June 2017 to R2.80 billion. The growth is attributable to
acquisitions to the value of R494.9 million, as well as capital expenditure incurred of R28.8 million. The historic portfolio increased by
4.0% compared to 30 June 2017. Asset quality continued to improve, with the average value per property increasing by 21.1% to
R65.1 million, and the average value per square meter increased by 7.7% to R12 223/m2.
Average
value per Value
Valuation property per m(2)
Portfolio valuation history R'million R'million R
Jun-14 1 109.1 34.7 8 836
Jun-15 1 361.8 40.1 9 780
Jun-16 1 925.1 49.4 10 355
Jun-17 2 204.4 53.8 11 345
Dec-17 2 801.1 65.1 12 223
As in previous interim reporting periods, the directors valued the group's investment property portfolio. The properties are valued
using the five-year discounted cash flow method, consistent with previous periods. Assumptions are made on the discount rates used
to determine the present value of the cash flows and on the capitalisation rate on an assumed sale after five years. The accounting
policy of the group is to value at least a third of the portfolio by independent external valuers annually at 30 June. All properties are
valued by independent external valuers at least every three years. The weighted average discount rate and capitalisation rate used
remained unchanged compared to 30 June 2017 at 15.0% and 10.2% respectively.
ACQUISITIONS
Shareholders are referred to Fairvest's various SENS announcements, regarding acquisitions by the company. Two new properties were
acquired during the period.
Properties acquired during the period
Purchase price Date of
Property Location GLA (m2) R'000 Anchor tenant transfer
Shoprite Empangeni * KwaZulu-Natal 13 660 172 500 Shoprite 18 Jul 17
Bara Precinct ** Gauteng 22 221 322 435 Cambridge Food, Pick n Pay 18 Dec 17
*The property was acquired in a newly incorporated wholly-owned subsidiary FPP Property Ventures 102 Proprietary Limited.
**Fairvest subscribed for 50.17% of the shares in Bara Precinct Proprietary Limited and the company became a subsidiary.
DEVELOPMENT OF SOUTHVIEW SHOPPING CENTRE
As communicated to shareholders on 8 November 2017, Fairvest entered into a strategic relationship with Abland Proprietary Limited
("Abland") in a newly incorporated subsidiary, South View Shopping Centre Proprietary Limited, of which Fairvest owns 50%.
A vacant plot of land was acquired in Soshanguve, Gauteng to develop a 7 602m2 shopping centre, anchored by Shoprite. Abland
will guarantee a 10% commencement yield on the development, for five years escalating at 7% annually. During the period, the
total development cost on the project amounted to R31.2 million and further development cost of R58.9 million is estimated for the
remainder of the financial year. The shopping centre is expected to open on 30 June 2018.
VALUE EXTRACTION
We continued with various value extraction projects on the current portfolio during the period and R29.5 million was spent on these
capital enhancement projects. The largest project was at St George's Square and Middestad Mall. At St George's Square we rebranded
the centre to its original name, Paddagat and upgraded the centre, attracting various new tenants and letting some of the vacancies.
At Middestad Mall we completed phase one of the redevelopment, upgrading the lighting, ceilings and walkways on the ground-
floor retail section, with phase two of the redevelopment in the planning stage. The Macassar Shoprite extension is expected to be
completed before the end of the financial year.
PORTFOLIO COMPOSITION, LETTING AND VACANCIES
Tenant grade as a percentage of GLA
A-grade tenants 74.1%
B-grade tenants 9.0%
C-grade tenants 16.9%
A- Anchor and national tenants (48.5% are occupied by the top 10 largest tenants)
B- Franchise, professional and large tenants
C- Other
The portfolio remains well diversified across South Africa, with the four largest provinces, KwaZulu-Natal, Western Cape, Free State
and Gauteng contributing 74.3% of revenue. The high national tenant component of 74.1% of the portfolio provides shareholders
with a low risk investment profile, with national grocer retailers occupying 33.8% of the portfolio.
Vacancies decreased from 4.7% to 3.2% or 7 245m2 during the period, mainly as a result of letting of vacancies at Middestad Mall,
Paddagat (previously St Georges Square), Richmond Shopping Centre and Clubview Corner. This improvement was partly offset by
new vacancies at Bara Precinct.
Based on Based on
Lease expiry profile rentable area gross rental
Vacant 3.1% 0.0%
Monthly 6.6% 6.2%
Jun-18 10.5% 10.5%
Jun-19 13.8% 16.0%
Jun-20 20.3% 22.8%
Jun-21 12.2% 12.7%
After Jun-22 33.5% 31.8%
During the period under review, 62 new leases were concluded with a total GLA of 6 996m2. Fairvest successfully renewed 15 842m2
of leases with a positive reversion achieved of 6.1%. Tenant retention for the period was 88.5%, an improvement from the 72.8%
for the previous financial year. The weighted average lease term decreased from 38 to 36 months.
CAPITAL RAISING ACTIVITIES
On 2 November 2017 Fairvest placed 58 974 359 new ordinary shares through a combination of a vendor consideration placement
and a general authority to issue shares for cash at an issue price of R1.95 per share, raising R115.0 million of new equity.
Shareholders are referred to the company's SENS announcement dated 9 October 2017, regarding the placement of 12 289 474
new ordinary shares which were issued through the dividend reinvestment alternative. The shares were issued at R1.90591 per share
resulting in the retention of R23.4 million of equity.
BORROWINGS
The loan to value ("LTV") ratio at 32.6%, increased from 22.4% at 30 June 2017 as a result of the acquisitions during the period,
which was partially offset by the capital raised. LTV is calculated as total interest-bearing debt divided by total property assets of the
debt. 46.5% was fixed either through swaps or fixed rate loans as at 31 December 2017, with a weighted average expiry for the
fixed debt of 12 months. During February 2018, various swaps were extended at favourable rates, which improved the weighted
average maturity to 23 months.
The weighted average all-in cost of funding decreased to 9.24% compared to 9.46% at 30 June 2017. The weighted average
maturity of debt increased from 15 months to 21 months. Discussions on the renewal of various expiring facilities are in progress with
funders and we expect the maturity profile of debt to improve further and available facilities to increase by 30 June 2018.
PROSPECTS
The company will continue to provide shareholders exposure to retail assets servicing the lower LSM market. As the outlook for South
Africa improves, we expect to see improved trading performance from tenants. With a low-risk tenant base and low vacancies, the
portfolio remains well positioned to continue to achieve strong property growth. We will remain conservatively geared and endeavour
to continue to improve the fixed portion of debt to minimise the impact of interest rate increases. Management remains confident
that Fairvest should be able to achieve the communicated distribution growth of between 9% and 10% for the full 2018 financial
year.
This view assumes no material deterioration in the macroeconomic environment relative to current levels, that no major corporate
failures will occur and that tenants will be able to absorb increases in municipal and utility costs. Forecast rental income is based on
contractual lease terms and anticipated market related renewals. This forecast is the responsibility of the board of Fairvest and has
not been reviewed or reported on by the auditors.
DIVIDEND WITH ELECTION TO REINVEST
The board has approved and declared a interim gross distribution, made out of income reserves, of 9.806 cents per share for the six-month
period ended 31 December 2017, payable to shareholders registered as such at the close of business on Friday, 6 April 2018.
Shareholders will be entitled, in respect of all or part of their shareholdings, to elect to reinvest the cash dividend of 9.806 cents per
share, in return for new Fairvest ordinary shares ("Reinvestment Alternative"), failing which they will receive the cash dividend.
Further details regarding the dividend and Reinvestment Alternative, including the tax treatment and a detailed timetable, will be
included in a separate SENS announcement, to be released today, 1 March 2018.
In accordance with Fairvest'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 taxable dividends for South African tax purposes in terms of section 25BB of the Income Tax Act.
SUBSEQUENT EVENTS
The directors of Fairvest are not aware of any material matters or circumstances arising between 31 December 2017 and this report
which may materially affect the financial position of the group or the results of its operation.
APPRECIATION
We extend our appreciation to our directors, management and staff for their valued efforts as well as our advisers and shareholders
for their continuing belief in and support of Fairvest.
For and on behalf of the board
Fairvest Property Holdings Limited
1 March 2018
Cape Town
Executive directors Non-executive directors
DM Wilder (Chief executive officer) JF du Toit (Chairman)
BJ Kriel (Chief financial officer) LW Andrag (Lead independent director)(#)
AJ Marcus (Chief operating officer)* KR Moloko(#)
* Alternate to DM Wilder N Mkhize(#)
JD Wiese(#)
TJ Cohen(#)
(#)Independent
Company Secretary
SecCorp Secretarial Services Proprietary Limited
Registered office
8th Floor, The Terraces, 34 Bree Street, Cape Town, 8001
Postnet Suite 30, Private Bag X3, Roggebaai, 8012
Transfer secretaries
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank
Johannesburg, 2196
PO Box 61051, Marshalltown, 2107
Auditor
BDO South Africa Incorporated
Registered Auditors
Sponsor
PSG Capital Proprietary Limited
www.fairvest.co.za
Date: 01/03/2018 07:15:00 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.
Sharenet Sites 
