TRANSCEND RESIDENTIAL PROPERTY FUND LIMITED - Response to Covid-19 and Withdrawal of Dividend Guidance

Response to Covid-19 and Withdrawal of Dividend Guidance

TRANSCEND RESIDENTIAL PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
Registration number 2016/277183/06
JSE Code: TPF ISIN: ZAE000227765
(Approved as a REIT by the JSE)
(“Transcend” or “the Company”)


RESPONSE TO COVID-19 AND WITHDRAWAL OF DIVIDEND GUIDANCE


Response to COVID-19
The COVID-19 pandemic has given rise to unprecedented circumstances globally, as well as in South
African financial markets. The Board of Directors of Transcend (“the Board”) supports President
Ramaphosa’s initiatives which have been implemented in a nationwide effort to “flatten the curve”
in respect of COVID-19 infections in South Africa.

Actions taken by the Company
The safety and well-being of Transcend’s people, tenants, communities and broader group of
stakeholders remain the Company’s priority while it works hard to contain and mitigate the
potential effects of the pandemic. Transcend is closely monitoring the recommendations issued by
the World Health Organisation, the South African Government and relevant authorities and will
continue to apply these initiatives across all properties and operations.

Management continues to take the necessary steps to ensure that a sound financial and liquidity
position is maintained during this period of uncertainty. This is supported by high occupancies and
strong positive cashflows generated by Transcend’s portfolio, although management and the Board
are aware that the impact of the “lockdown” and a slowdown in economic activity may affect these
conditions in the short-term. The Company also has no commercial bank debt obligations maturing
during the next 12-month period.

Operational update
Transcend’s portfolio extends across 4 722 individual units that are let on month-to-month leases
with tenants. The Company and its property management teams have been working constantly
through this challenging time to maintain, secure and operate its properties and business
effectively. The Company’s portfolio achieved an occupancy of 95.7% at 31 March 2020 and an
average collection on rental income of 97% for the first quarter ending 31 March 2020. The
following considerations are pertinent:
     -  Residential property is a more defensive and resilient asset class than others due to a broad
        and diversified tenant base; however, the current set of circumstances bring significant
        uncertainty and unchartered territory to all financial markets, the property sector and the
        Company.
     -  The Company currently continues to generate strong cashflows at a property level, as
        monthly and quarterly rental collections continue uninterrupted to date.
     -  The Company has implemented an income declaration process for tenants whose income
        has been affected by this pandemic.
     -  The Company continues to be in constant communication with tenants and key service
        providers to keep abreast of and review their circumstances as they respond to the
        pandemic. Operational staff are providing ongoing feedback to management, and
        consequently, to the Board. Management will adjust the Company’s approach when and if
        deemed necessary.

Withdrawal of dividend guidance
In light of current market uncertainties, the Board is of the view that it is no longer appropriate for
its distribution guidance, as previously communicated to shareholders, to remain in place. The
Board will provide further guidance once there is greater certainty on the impact of COVID-19 on
the business of Transcend.


Bryanston
6 April 2020

Sponsor
Questco Corporate Advisory Proprietary Limited

Date: 06-04-2020 07:05:00
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