Wrap Text
Reviewed consolidated condensed interim results for the six months ended 30 September 2018
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
(“OCPF” or “the Fund”)
Reviewed consolidated condensed interim results for the six months
ended 30 September 2018
Condensed consolidated statement of comprehensive income
for the 6 months ended 30 September 2018
Reviewed Reviewed Audited
6 months 6 months 12 months
to 30 to 30 to 31
September September March
2018 2017 2018
Restated Restated
R’000 R’000 R’000
Income 56 952 51 928 106 135
Rental and related income 42 782 38 770 79 758
Income from investments (excluding
non-permissible income and fair value
adjustments) 12 631 12 097 22 575
Straight-lining of lease income 1 539 1 061 3 802
Expenses 22 213 20 404 41 823
Property expenses 18 394 16 757 34 314
Service charges 3 103 2 783 5 800
Other operating expenses 716 864 1 709
Net income from rentals and
investments 34 739 31 524 64 312
Fair value adjustment to investment
properties excluding straight-lining
of lease income (1 539) (1 061) 38 289
Fair value adjustment to investment
properties - - 42 091
Straight-lining of lease income (1 539) (1 061) (3 802)
Profit for the period before fair 33 200 30 463 102 601
value adjustments to financial assets
and realised gains
Fair value adjustments and realised
gains to investments: 67 251 10 689 16 652
Realised gain on disposal of - 9 140 16 523
available-for-sale financial assets
Fair value movements on financial
assets at fair value through profit or
loss 67 251 1 549 129
Operating profit for the period 100 451 41 152 119 253
Net non-permissible income (118) (285) (531)
Non-permissible investment income 194 332 618
Non-permissible income dispensed (312) (617) (1 149)
Net profit for the period 100 333 40 867 118 722
Other comprehensive income
Items that may subsequently be - 21 628 (52 093)
classified to profit and loss
Fair value gain/(loss) on available-
for-sale financial assets - 30 768 (35 570)
Realised gain on disposal of
available-for-sale financial assets - (9 140) (16 523)
Total Comprehensive Income for the
period 100 333 62 495 66 629
Basic earnings per unit (cents) 165.2 71.4 203.4
Additional information:
Headline earnings and distribution
income reconciliation
Basic earnings before non-permissible
income adjustment 100 451 41 152 119 253
Non-permissible investment income 194 332 618
Basic earnings after non-permissible
income adjustment 100 645 41 484 119 871
Non-permissible income dispensed (312) (617) (1 149)
Basic earnings 100 333 40 867 118 722
Adjusted for:
Realised gain on disposal of
available-for-sale financial assets - (9 140) (16 523)
Fair value adjustment to investment
properties 1 539 1 061 (38 289)
Headline earnings 101 872 32 788 63 910
Less: Fair value adjustments on
financial assets at fair value through
profit or loss (64 661) - -
Less: Fair value adjustments on other
financial assets at fair value through
profit or loss (2 441) (1 407) (77)
Less: Fair value adjustments on tenant
deposits (149) (142) (52)
Less: Straight-line lease accrual (1 539) (1 061) (3 802)
Distributable income excluding non-
permissible income 33 082 30 178 59 979
Basic earnings and diluted earnings
per unit (cents) 165.2 71.4 203.4
Headline earnings and diluted headline
earnings per unit (cents) 167.8 57.3 109.5
Distribution per unit including non-
permissible income (cents) 55.0 53.8 104.7
Distribution per unit excluding non-
permissible income (cents) 54.5 52.7 102.7
Weighted average units in issue 60 723 220 57 235 096 58 382 990
Units in issue at the end of the
period 61 219 094 57 727 809 59 992 811
Additional information:
Reconciliation of Distributable Income
for the 6 months ended 30 September
2018
Rental income 32 426 29 460 60 651
Rental recoveries 10 994 9 864 20 272
Lease incentives (638) (554) (1 165)
Rental and related income 42 782 38 770 79 758
Less: Property expenses (18 394) (16 757) (34 314)
Property operating income 24 388 22 013 45 444
Investment income excluding non- 12 631 12 098 22 575
permissible investment income
Fair value adjustments on financial
assets at fair value through profit or
loss 64 661 - -
Fair value adjustments on other
financial assets at fair value through
profit or loss 2 590 1 548 129
Realised gain on disposal of
available-for-sale financial assets - 9 140 16 523
Income from investments excluding non-
permissible income 79 882 22 787 39 227
Non-permissible investment income
received 194 332 618
Total investment income 80 076 23 119 39 845
Net property and investment income 104 464 45 131 85 289
Less: Fair value adjustment on
financial assets at fair value through
profit or loss and tenant deposits (64 661) - -
Less: Fair value adjustment on other
financial assets at fair value through
profit or loss and tenant deposits (2 590) (1 548) (129)
Less: Realised gain on disposal of
available-for-sale financial assets - (9 140) (16 523)
Service charges and other operating
expenses (3 819) (3 647) (7 509)
Distributable income including non-
permissible income 33 394 30 795 61 128
Non-permissible rental income and
recoveries (118) (285) (531)
Non-permissible investment income (194) (332) (618)
Distributable income excluding non-
permissible income 33 082 30 178 59 979
Condensed consolidated statement of financial position
as at 30 September 2018
Reviewed Reviewed Audited
30 30 31
September September March
2018 2017 2018
R’000 R’000 R’000
Assets
Non-current assets 1 208 895 1 063 104 1 118 910
Investment properties 683 287 570 983 668 997
Property, plant and equipment 195 334 291
Straight-line lease accrual 18 287 14 166 17 067
Financial assets at fair value through
profit or loss 507 126 - -
Available-for-sale financial assets - 477 621 432 555
Current assets 168 649 196 575 161 685
Trade receivables 3 733 3 793 4 097
Other receivables 7 263 12 284 7 103
Straight-line lease accrual 930 770 611
Other financial assets at fair value
through profit or loss 142 989 153 054 138 519
Other short-term financial assets 8 763 7 553 8 368
Cash and cash equivalents 4 971 19 121 2 987
Total assets 1 377 544 1 259 679 1 280 595
Unitholders’ funds and liabilities
Unitholders’ funds 1 327 442 1 215 336 1 235 374
Capital of the Fund 831 530 761 008 806 713
Retained income 27 792 20 677 25 880
Other reserves 468 120 433 651 402 781
Current liabilities 50 102 44 343 45 221
Trade payables 13 477 11 021 11 574
Accruals 583 438 448
Other payables 1 319 1 346 2 250
Trade payables to related parties 1 308 948 921
Unitholders for distribution 33 373 30 451 30 014
Non-permissible income available for
dispensation 42 139 14
Total unitholders’ funds and
liabilities 1 377 544 1 259 679 1 280 595
Condensed consolidated statement of changes in unitholders’ funds
for the 6 months ended 30 September 2018
Capital
of the Other Retained
Fund reserves income Total
R’000 R’000 R’000 R’000
Balance at 31
March 2017 736 401 412 023 9 988 1 158 412
Net profit for the
period ended 30
September 2017 - - 40 867 40 867
Other
Comprehensive
Income
Realised gain on
disposal of
available-for-sale
financial assets - (9 140) - (9 140)
Fair value gain
on available-for-
sale financial
assets - 30 768 - 30 768
Total
Comprehensive
Income for the
period ended 30
September 2017 - 21 628 40 867 62 495
Issue of units 24 980 - - 24 980
Transaction costs
for issue of new
units (113) - - (113)
Distribution
received in
advance (260) - 260 -
Distribution to
unitholders - - (30 438) (30 438)
Balance at 30
September 2017 761 008 433 651 20 677 1 215 336
Net profit for the
period ended 31
March 2018 - - 77 855 77 855
Other
Comprehensive
Income
Realised gain on
disposal of
available for sale
financial assets - (7 383) - (7 383)
Fair value loss on
available-for-sale
financial assets - (66 338) - (66 338)
Total
Comprehensive
Income for the
period ended 31
March 2018 - (73 721) 77 855 4 134
Issue of units 26 053 - - 26 053
Units issued for
property
acquisitions 20 000 - - 20 000
Transaction costs
for issue of new
units (148) - - (148)
Transfer to other
reserve - 42 851 (42 851) -
Distribution
received in
advance (200) - 200 -
Distribution to
unitholders - - (30 001) (30 001)
Balance at 31
March 2018 806 713 402 781 25 880 1 235 374
Adjustment on
adoption of IFRS 9 - (154 295) 154 295 -
Balance at 1 April
2018 806 713 248 486 180 175 1 235 374
Net profit for the
period ended 30
September 2018 - - 100 333 100 333
Other
Comprehensive
Income
Fair value gain on
available-for-sale
financial assets - - - -
Realised gain on
disposal of
available-for-sale
financial assets - - - -
Total
Comprehensive
Income for the
period ended 30
September 2018 - - 100 333 100 333
Issue of units 25 249 - - 25 249
Transaction costs
for issue of new
units (162) - - (162)
Distribution
received in
advance (270) - 270 -
Distribution to
unit holders - - (33 352) (33 352)
Transfer to fair
value movements on
financial assets
reserve - 219 634 (219 634) -
Balance at 30
September 2018 831 530 468 120 27 792 1 327 442
Condensed consolidated statement of cash flows
for the 6 months ended 30 September 2018
Reviewed Reviewed Audited
6 months to 6 months to 12 months to
30 September 30 September 31 March
2018 2017 2018
R’000 R’000 R’000
Cash flows from operating
activities
Net profit for the period 100 333 40 867 118 722
Adjusted for:
Non-permissible investment
income received (194) (332) (618)
Depreciation 96 101 198
Provision for receivables
impairment 669 (462) (312)
Straight-line lease accrual (1 539) (1 061) (3 802)
Lease incentives 638 554 1 165
Realised gain on sale of
available-for-sale financial
assets - (9 140) (16 523)
Fair value movements on
financial assets at fair
value through profit or loss (64 661) - -
Fair value adjustment on
other financial assets at
fair value through profit or
loss and other short-term
financial assets (2 590) (1 548) (129)
Fair value adjustment on
investment property excluding
straight-lining of lease
income 1 539 1 061 (38 289)
Net operating cash flow
before changes in working 34 291 30 040 60 412
capital
Decrease/(increase) in
current assets
Trade receivables (305) 698 1 453
Other receivables (160) (6 795) (1 615)
(Decrease)/increase in
current liabilities
Trade payables 1 903 (219) 327
Accruals 135 (14) (3)
Other payables (931) (949) (678)
Trade payables to related
parties 387 (488) (516)
Cash generated from 35 320 22 273 59 380
operations
Non-permissible investment
income received 194 332 618
Unitholders for distribution (4 744) (4 579) (8 827)
Non-permissible income 28 (12) (136)
Net cash inflow from
operating activities 30 798 18 014 51 035
Cash flows from investing
activities
Acquisition of available-for-
sale financial assets - (7 953) (61 289)
Acquisition of financial
assets at fair value through
profit or loss (11 047) - -
Acquisition of investment in
subsidiary - - (36 247)
Acquisition of other
financial assets at fair
value through profit or loss (2 029) (17 142) (20 937)
Capital expenditure on
investment properties (16 467) (724) (4 117)
Proceeds from disposal of
financial assets at fair
value through profit and loss - 1 921 18 921
Proceeds from disposal of
available-for-sale financial
assets 1 139 19 997 52 061
Proceeds from disposal of
other short-term financial
assets 734 - -
Acquisition of other short
term financial assets (982) (830) (1 873)
Lease incentives paid - - (203)
Acquisition of property,
plant and equipment - - (54)
Net cash outflow from
investing activities (28 652) (4 731) (53 738)
Cash flows from financing
activities
Transaction costs for issue
of new units (162) (113) (261)
Net cash flow from financing
activities (162) (113) (261)
Net increase/(decrease) in
cash and cash equivalents 1 984 13 170 (2 964)
Cash and cash equivalents
At beginning of period 2 987 5 951 5 951
At end of period 4 971 19 121 2 987
Segment information for the 6 months ended 30 September 2018
Indus- Invest- Corpo-
Retail Offices trial ments rate Total
R’000 R’000 R’000 R’000 R’000 R’000
Segment revenue
Property income
Rental income 13 682 6 090 12 016 - - 31 788
Recoveries 6 634 1 247 3 113 - - 10 994
Income from
investments
excluding non-
permissible
income
Dividend income
offshore - - - 5 959 - 5 959
Permissible
investment
income- domestic - - - 6 672 - 6 672
20 316 7 337 15 129 12 631 - 55 413
Segment expense
Property
expenses 11 233 2 461 4 031 - - 17 725
Provision for
receivables
impairment 551 31 87 - - 669
Service charges - - - - 3 103 3 103
Other operating - - - 110 606 716
expenses
11 784 2 492 4 118 110 3 709 22 213
Segment result
Profit for the
period before
fair value
adjustments to
financial assets
and realised
gains 8 532 4 845 11 011 12 521 (3 709) 33 200
Net finance
income
Non-permissible - - - 30 164 194
investment
income received
NPI Dispensed (118) - - (30) (164) (312)
Net
profit/(loss)
before
straight-line
lease income
and fair value
adjustment to
investment
properties 8 414 4 845 11 011 12 521 (3 709) 33 082
Realised
gain/(loss) on
disposal of
available-for-
sale financial
assets - - - - - -
Straight-lining
of lease income (173) 761 951 - - 1 539
Fair value
adjustment to
financial assets
at fair value
through profit
or loss - - - 64 661 - 64 661
Fair value
adjustment on
other financial
assets at fair
value through
profit or loss
and tenant
deposits - - - 2 590 - 2 590
Fair value
adjustment to
investment
properties 173 (761) (951) - - (1 539)
Net
profit/(loss)
after straight-
line lease
income and fair
value adjustment
to investment
properties 8 414 4 845 11 011 79 772 (3 709) 100 333
Segment assets
Investment
properties 265 532 131 159 286 596 - - 683 287
Property, plant
and equipment 195 - - - - 195
Straight-line
lease accrual
non-current 7 339 2 766 8 182 - - 18 287
Straight line
lease accrual 554 4 372 - - 930
current
Financial assets
at fair value
through profit
or loss - - - 507 126 - 507 126
Other financial
assets at fair
value through
profit or loss - - - 142 989 - 142 989
Trade
receivables 2 173 626 934 - - 3 733
Other
receivables 1 328 828 2 207 2 785 115 7 263
Other short term
financial assets 4 632 86 4 045 - - 8 763
Cash and cash
equivalents - - - 4 971 - 4 971
281 753 135 469 302 336 657 871 115 1 377 544
Segment
liabilities
Trade payables 7 344 710 5 330 - 93 13 477
Accruals 18 6 22 - 537 583
Other payables 654 15 90 - 560 1 319
Trade payables
to related
parties 291 4 49 54 910 1 308
Unitholders for - - - - 33 373 33 373
distribution
Non-permissible - - - - 42 42
income available
for dispensation
8 307 735 5 491 54 35 515 50 102
Net segment
current assets/
(liabilities) (174) 805 1 695 150 691 (35 400) 117 617
Capital
expenditure 13 957 20 2 490 - - 16 467
Segment information for the 6 months ended 30 September 2017
Indus- Invest- Corpo-
Retail Offices trial ments rate Total
R’000 R’000 R’000 R’000 R’000 R’000
Segment revenue
Property income
Rental income 12 786 5 456 10 664 - - 28 906
Recoveries 6 364 1 024 2 476 - - 9 864
Income from
investments
excluding non-
permissible
income
Dividend income
offshore - - - 5 726 - 5 726
Permissible
investment
income- domestic - - - 6 372 - 6 372
19 150 6 480 13 140 12 098 - 50 868
Segment expense
Property
expenses 10 203 2 310 4 244 - - 16 757
Service charges - - - - 2 783 2 783
Other operating - - - 277 587 864
expenses
10 203 2 310 4 244 277 3 370 20 404
Segment result
Profit for the
period before
fair value
adjustments to
financial assets
and realised
gains 8 947 4 170 8 896 11 821 (3 370) 30 464
Net finance
income
Non-permissible
investment
income received - - - - 332 332
NPI Dispensed (285) - - - (332) (617)
Net
profit/(loss)
before
straight-line
lease income
and fair value
adjustments to
investment
properties 8 662 4 170 8 896 11 821 (3 370) 30 179
Realised gain on
disposal of
available-for-
sale financial
assets - - - 9 140 - 9 140
Straight-lining
of lease income 491 34 536 - - 1 061
Fair value
adjustment to
financial assets
at fair value
through profit
or loss - - - 1 548 - 1 548
Fair value
adjustment to (491) (34) (536) - - (1 061)
investment
properties
Net
profit/(loss)
after straight-
line lease
income and fair
value adjustment
to investment
properties 8 662 4 170 8 896 22 509 (3 370) 40 867
Segment assets
Investment
properties 234 712 122 356 213 915 - - 570 983
Property, plant
and equipment 334 - - - - 334
Straight-line
lease accrual
non-current 6 981 34 7 151 - - 14 166
Straight line
lease accrual
current 752 - 18 - - 770
Available-for-
sale financial
assets - - - 477 621 - 477 621
Other short term
financial assets 4 159 82 3 312 - - 7 553
Trade
receivables 2 415 608 770 - - 3 793
Other
receivables 902 154 2 337 8 810 81 12 284
Financial assets
at fair value
through profit
or loss - - - 153 054 - 153 054
Cash and cash
equivalents - - - 19 121 - 19 121
250 255 123 234 227 503 658 606 81 1 259 679
Segment
liabilities
Trade payables 5 031 575 5 397 - 18 11 021
Accruals 18 6 22 - 392 438
Other payables 654 15 90 - 587 1 346
Trade payables
to related
parties 290 4 49 54 551 948
Unitholders for - - - - 30 451 30 451
distribution
Non-permissible - - - - 139 139
income available
for dispensation
5 993 600 5 558 54 32 138 44 343
Net segment
current assets/ 2 235 244 879 180 931 (32 057) 152 232
(liabilities)
Capital
expenditure 398 13 313 - - 724
Segment information for the 12 months ended 31 March 2018
Indus- Invest- Corpo-
Retail Offices trial ments rate Total
R’000 R’000 R’000 R’000 R’000 R’000
Segment revenue
Property income
Rental income 26 282 11 518 21 686 - - 59 486
Recoveries 13 079 2 437 4 756 - - 20 272
Income from
investments
excluding non-
permissible
income
Dividend income
offshore - - - 11 233 - 11 233
Permissible
investment
income- domestic - - - 11 342 - 11 342
39 361 13 955 26 442 22 575 - 102 333
Segment expense
Property
expenses 20 794 4 987 8 275 - - 34 056
Provision for
receivables
impairment 242 16 - - - 258
Service charges - - - - 5 800 5 800
Other operating
expenses - - - 490 1 219 1 709
21 036 5 003 8 275 490 7 019 41 823
Straight-lining
of lease income 837 2 005 960 - - 3 802
Fair value
adjustment to
investment
properties 13 583 9 492 15 214 - - 38 289
Segment result
Profit for the
period before
fair value
adjustments to
financial assets
and realised
gains 32 745 20 450 34 341 22 085 (7 019) 102 602
Net finance
income
Non-permissible
investment
income received - - - 121 497 618
Non-permissible
income dispensed (532) - - (120) (497) (1 149)
Net
profit/(loss)
before
straight-line
lease income
and fair value
adjustment to
investment
properties 32 213 20 450 34 341 22 086 (7 019) 102 071
Fair value
adjustment to
financial assets
at fair value
through profit
or loss - - - 129 - 129
Realised gain on
sale of
available-for-
sale financial
assets
- - - 16 523 - 16 523
Net
profit/(loss)
after straight-
line lease
income and fair
value adjustment
to investment
properties 32 213 20 450 34 341 38 737 (7 019) 118 722
Segment assets
Investment
properties 251 766 131 876 285 355 - - 668 997
Property, plant
and equipment 291 - - - - 291
Straight-line
lease accrual
non-current 7 546 2 005 7 516 - - 17 067
Straight line
lease accrual
current 524 - 87 - - 611
Available-for-
sale financial
assets - - - 432 555 - 432 555
Other short term
financial assets 4 375 83 3 910 - - 8 368
Trade
receivables 2 376 762 711 - 247 4 097
Other
receivables 1 407 968 2 402 2 293 33 7 103
Financial assets
at fair value
through profit
or loss - - - 138 519 - 138 519
Cash and cash
equivalents - - - 2 987 - 2 987
268 285 135 695 299 981 576 354 280 1 280 595
Segment
liabilities
Trade payables 5 778 712 5 047 - 37 11 574
Accruals - - - - 448 448
Other payables 690 14 1 216 - 330 2 250
Trade payables
to related
parties 188 2 117 27 587 921
Unitholders for - - - - 30 014 30 014
distribution
Non-permissible - - - - 14 14
income available
for dispensation
6 656 728 6 380 27 31 430 45 221
Net segment
current assets/
(liabilities) 2 026 1 085 730 143 772 (31 150) 116 463
Capital
expenditure 3 627 - 544 - - 4 171
Basis of preparation and accounting policies
The condensed consolidated interim financial statements of Oasis Crescent
Property Fund (“the Fund” or “OCPF”) have been prepared in accordance with
International Financial Reporting Standard (IFRS), (IAS) 34 Interim
Financial Reporting, the JSE Listings Requirements, the requirements of the
Collective Investment Schemes Control Act of 2002 the SAICA Financial
Reporting Guides, as issued by the Accounting Practices Committee, and the
Financial Reporting Pronouncements, as issued by the Financial Reporting
Standards Council. The financial statements are prepared on the historical
cost basis as modified by the revaluation of investment properties,
financial assets at fair value through profit or loss and available-for-sale
financial assets. The accounting policies and methods of computation
applied in this interim report are in terms of IFRS and are consistent
with the policies as set out in the most recent annual financial
statements, which should be read in conjunction with this report, except
as set out below. The Fund’s external auditor, PricewaterhouseCoopers
Inc., has reviewed the financial information set out in this report. Their
unqualified review report is available for inspection at the Fund’s
registered office. The operational results of the Fund are not affected by
seasonal or cyclical fluctuations.
These condensed reviewed results were compiled by Michael Swingler
CA(SA).
Changes in accounting policies
This note explains the impact of the adoption of IFRS 9 Financial
Instruments and IFRS 15 Revenue from Contracts with Customers on OCPF's
financial statements and also discloses the new accounting policies that
have been applied from 1 April 2018, where they are different to those
applied in prior periods.
Impact on the financial statements
OCPF elected to adopt both standards prospectively from 1 April 2018 with
no restatement to comparatives in line with the transition choices.
From 1 April 2018, OCPF classifies its financial assets in the following
measurement categories:
-those to be measured subsequently at fair value through profit or loss
(FVPL); and
- those to be measured at amortised cost.
The classification depends on the entity's business model for managing the
financial assets and the contractual terms of the cash flows. For assets
measured at fair value, gains and losses will be recorded in profit or
loss.
Measurement
At initial measurement, the entity measures a financial asset at its fair
value and transaction costs are expensed in profit or loss.
Equity instruments
OCPF subsequently measures all equity instruments at fair value. Dividends
from such investments continue to be recognised in profit or loss as other
income when OCPF's rights to receive payments are established.
Changes in the fair value of financial assets at FVPL are recognised in
other gains/ (losses) in the statement of profit or loss as applicable.
Impairment
For trade receivables, OCPF applies the simplified approach permitted by
IFRS 9, which requires expected lifetime losses to be recognised from
initial recognition of the receivables.
Non-derivative financial liabilities
Creditors are measured at amortised cost.
IFRS 15 Revenue from Contracts with Customers
The impact is considered to be immaterial as the majority of revenue is in
the scope of IAS 17 Leases.
Restatement of Presentation to Condensed Consolidated Statement of
Comprehensive Income
Reviewed Reviewed Audited
6 months 6 months 12
to 30 to 30 month
September September to 31
2018 2017 March
2018
R’000 R’000 R’000
Income
Income from investments excluding
non-permissible income (as
previously reported)
15 221 22 786 39 227
Less: Amounts now shown
separately
Realised gain on disposal of
available-for-sale financial
assets - 9 140 16 523
Fair value adjustment on
financial assets at fair value
through profit or loss 2 590 1 549 129
Income from investments
(excluding non-permissible income
and fair value movements) as
restated 12 631 12 097 22 575
Basic earnings and diluted
earnings per unit (cents)
(unchanged) 165.2 71.4 203.4
OCPF has made a change to the presentation of Income in order to
separately disclose fair value adjustments on financial instruments.
Realised and unrealised gains were previously reflected in ‘Income from
investments excluding non-permissible income’ and is now reflected
separately as ‘Realised gain on disposal of available-for-sale financial
assets’ and ‘Fair value adjustment on financial assets at fair value
through profit or loss’.
The change does not impact on the operating profit, distribution per unit
and basic earnings and diluted earnings per unit reported in the previous
period.
Profit for the period before fair value adjustments to financial assets
and realised gains
The “Profit for the period before fair value adjustments to financial
assets and realised gains” is presented on the face of the statement of
comprehensive income, being the Fund’s operating results excluding fair
value adjustments on financial assets. Management believes it to be
relevant to the understanding of the Fund's financial performance. The
measure is used for internal performance analysis and provides additional
useful information on underlying trends to unitholders. This measure is
not a defined term under IFRS and may therefore not be comparable with
similarly titled measures reported by other entities. It is not intended
to be a substitute for, or superior to, measures as required by IFRS.
Fair Value Movements on Financial Assets Reserve
During the reporting period, the Fund created the Fair Value Movements on
Financial Assets Reserve which is disclosed as part of the "Other Reserve"
in the Statement of Changes in Unitholders' Funds. The purpose of this
reserve is to transfer to or from all fair value movements on "Financial
Assets at Fair Value through profit or loss" that are not available for
distribution.
Fair value estimation of investments
Financial instruments and other assets carried at fair value are
valued in terms of IFRS 13.
The fair value of financial instruments traded in active markets (such as
available-for-sale securities) is based on quoted market prices at the end
of the reporting period.
Specific valuation techniques used to determine fair value include:
Level 1: Quoted prices (unadjusted) in active markets for identical assets
or liabilities
Level 2: Inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly (as prices) or
indirectly (derived prices)
Level 3: Inputs for the asset or liability that are not based on
observable market data (unobservable inputs)
The Fund transfers assets between levels in the fair value hierarchy on
the date that there is a change in the circumstances that give rise to the
transfer.
The information below analyses financial assets and financial liabilities,
which are carried at fair value, by level of hierarchy as required by IFRS
7 and IFRS 13.
The following table presents the Fund’s assets that are measured at
fair value at 30 September 2018:
Assets Level 1 Level 2 Level 3 Total
R ’000 R ’000 R ’000 R ’000
Financial assets at fair
value through profit or loss
Investment in Oasis Crescent
Global Property Equity Fund - 444 424 - 444 424
Investment in listed 31 031 - - 31 031
property funds
Investment in Oasis Crescent
International Property Equity
Feeder Fund - 31 671 - 31 671
Other financial assets at fair value
through profit or loss
Investment in Oasis Crescent
Income Fund - 142 989 - 142 989
Other short-term financial
Assets
Tenant deposits - 8 763 - 8 763
Investment property
Investment property - - 683 287 683 287
The following table presents the Fund’s assets that are measured at
fair value at 30 September 2017:
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 - 407 316 - 407 316
Investment in listed 65 663 - - 65 663
property funds
Investment in Oasis Crescent
International Property Equity
Feeder Fund - 4 642 - 4 642
Other financial assets at fair value
through profit or loss
Investment in Oasis Crescent
Income Fund - 153 054 - 153 054
Other short-term financial
assets
Tenant deposits - 7 553 - 7 553
Investment property
Investment property - - 570 983 570 983
The following table presents the Fund’s assets that are measured at fair
value at 31 March 2018:
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 - 374 946 - 374 946
Investment in listed property
funds 34 724 - - 34 724
Investment in Oasis Crescent
International Property Equity
Feeder Fund - 22 885 - 22 885
Other financial assets at fair
value through profit or loss
Investment in Oasis Crescent
Income Fund - 138 519 - 138 519
Other short-term financial assets
Tenant deposits - 8 368 - 8 368
Investment property
Investment property - - 668 997 668 997
The carrying value of financial liabilities approximates their fair value
due to the short term nature of the instruments.
The fair value of financial instruments traded in active markets is based
on quoted market prices at the statements of financial position date. A
market is regarded as active if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing
service, or regulatory agency, and those prices represent actual and
regularly occurring market transactions on an arm’s length basis. These
instruments are included in level 1.
The instruments included in level 2 comprises of Irish Stock Exchange
property equity investments classified as financial assets through profit
and loss 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:
Financial assets at fair value through profit or loss
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
that 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.
Oasis Crescent International Property Equity
Feeder Fund:
The fair value of investments in Oasis Crescent International Property
Equity Feeder Fund is determined using the closing NAV price published by
Oasis Crescent Management Company Limited, the management company of the
Fund. These investments are not actively traded on an exchange and are
therefore not classified as level 1.
Investment in listed property funds
The fair value of these investments is determined using the closing price
as at statement of financial position date. These shares are listed and
traded on the JSE and are therefore classified as level 1.
Other 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 NAV price published by Oasis Crescent Management Company
Ltd., the management company of that fund. These investments are not
actively traded on an exchange and are therefore not classified as level 1.
Investment property
Reviewed Reviewed Audited
6 months 6 months 31
to 30 to 30 March
September September 2018
2018 2017
R’000 R’000 R’000
Balance as at beginning of the
period 668 997 571 874 571 874
Acquisitions during the period - - 55 679
Fair value adjustment on
investment properties excluding
straight-lining of lease income (1 539) (1 061) 38 289
Movement in lease incentives (638) (554) (962)
Capital expenditure on investment
properties 16 467 724 4 117
Balance at the end of the period 683 287 570 983 668 997
The valuation of investment properties include comparable 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, vacant levels 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 2018 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% (2017: 7.50% and 10.25%). Changes in
the capitalisation rate attributable to changes in market conditions can
have a significant impact on property valuations. The valuation of
investment properties may also be influenced by changes in vacancy rates.
There have been no significant transfers between level 1, 2 or 3 during the
period under review, nor were there any significant changes to the
valuation techniques and inputs used to determine fair values.
Related party transactions and balances
Identity of the related parties with whom material transactions have
occurred
Oasis Crescent Property Fund Managers Ltd. (“the Manager”) is the
management company of the Fund in terms of the Collective Investment
Schemes Control Act.
Oasis Group Holdings (Pty) Ltd., the parent of Oasis Crescent Property
Fund Managers Ltd., is a tenant at The Ridge@Shallcross and 24 Milner
Road.
As disclosed in the prospectus of Oasis Crescent Income Fund and
Oasis Crescent International Property Equity Feeder Fund, a
management fee is charged for investing in the Oasis Crescent Income
Fund by Oasis Crescent Management Company Ltd., the manager of the
Fund.
Abli Property Developers (Pty) Ltd. renders property development
consulting services to the Fund on capital development projects.
Oasis Asset Management Ltd. renders investment management services to
the Fund on financial assets at fair value through profit and loss.
Oasis Crescent Property Company (Pty) Ltd. renders services relating
to identifying and securing tenants for the Fund.
There are common Directors to Oasis Crescent Property Fund Managers
Ltd., Oasis Group Holdings (Pty) Ltd., Oasis Crescent Property
Company (Pty) Ltd., Oasis Crescent Management Company Ltd., Oasis
Asset Management Ltd. 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 Ltd.
The Fund pays a consulting fee to Abli Property Developers (Pty) Ltd. for
consulting services rendered in respect of capital development projects.
The Fund pays an investment management fee to Oasis Asset Management Ltd.
for investment management services rendered in respect of investments in
listed property funds.
The Fund pays an administration fee to Oasis Crescent Property Company
(Pty) Ltd. for identifying and securing tenants for properties held by the
Fund.
Related party transactions Reviewed Reviewed Audited
6 months to 6 months to 12 months
30 September 30 September to 31 March
2018 2017 2018
Related party transactions R’000 R’000 R’000
Service charge paid to Oasis
Crescent Property Fund Managers
Ltd. 3 103 2 783 5 800
Property management fees paid to
Oasis Crescent Property Fund
Managers Ltd. 739 680 1 392
Rental and related income paid by
Oasis Group Holdings (Pty) Ltd. at
The Ridge@Shallcross (245) (224) (461)
Rental and related income paid by
Oasis Group Holdings (Pty) Ltd. at
24 Milner Road (443) (386) (840)
Letting commission paid to Oasis
Crescent Property Company (Pty)
Ltd. 65 22 1 162
Property related expenses paid to
Oasis Crescent Property Company
(Pty) Ltd. 482 - 306
Consulting fees paid to Abli
Property Developers(Pty)Ltd. for
consulting services on capital
projects 330 16 87
Investment management fees paid to
Oasis Asset Management Ltd 110 277 490
Related party balances
Reviewed Reviewed Audited
30 September 30 September 31 March
2018 2017 2018
Related party balance R’000 R’000 R’000
Trade payables to Oasis Crescent
Property Fund Managers Ltd. (789) (674) (743)
Trade payables to Oasis Group
Holding (Pty) Ltd. (194) (181) (74)
Trade payables to Oasis Asset
Management Ltd. (20) (54) (27)
Trade payables to Oasis Crescent
Property Company (Pty) Ltd. (155) (22) (58)
Trade payables to Abli Property
Developers(Pty) Ltd. (150) (18) (19)
Subsequent Events
There were no subsequent events or transactions that require disclosure in
the Interim Report.
Manager’s report
INTRODUCTION
The Oasis Crescent Property Fund is a well-diversified REIT invested in
South African direct and listed property investments and high quality global
listed 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. This objective is
achieved through our diversification strategy and the active management of
the direct property portfolio as covered in more detail under the Portfolio
Overview section below. Our focused approach has delivered significant real
wealth creation for investors with an annualised total unitholder return of
12.8% relative to annualised inflation of 5.9% since inception, resulting in
a real return of 6.9%. The Fund’s annualised total intrinsic value return is
12.8% per annum since inception.
Figures in %
Cumulative returns Since HY2019 HY2018 FY2018 FY2017 FY2016 FY2015
Inception
Unitholder return 370.6 370.6 N/A 349.7 321.1 286.3 227.3
Intrinsic value 369.4 369.4 N/A 334.7 312.2 302.8 248.7
return
Inflation 108.1 108.1 N/A 103.1 95.2 83.7 71.7
Annual Returns Since HY2019 HY2018 FY2018 FY2017 FY2016 FY2015
Inception
Unitholder return 12.8 4.6 1.4 6.8 9.0 18.0 23.4
Intrinsic value 12.8 8.0 5.3 5.4 2.3 15.5 18.4
return
Inflation 5.9 2.5 1.6 4.0 6.3 7.0 3.9
Market Price 2 100 2 000 2 060 2 025 1 950 1 750
NAV 2 168 2 105 2 059 2 050 2 101 1 919
MARKET OVERVIEW
Global REITS with a high exposure to the major global cities, positive
secular demand drivers, enhancing refurbishments and superior balance sheets
are well positioned to outperform in a normalising interest rate
environment. The level of supply in developed property markets has remained
disciplined and net absorption remains positive in most of the markets. The
demand for South African office space is linked to confidence and the
employment outlook, which is going to take time to recover. In the
industrial sector, the requirement for supply chain efficiency remains a
positive driver of demand for logistics space while South African shopping
centres that are appealing destinations or offer convenience are better
positioned to grow their trading densities and rentals in a more competitive
environment. There has been a shift of capital out of commercial and retail
properties into high-tech industrial properties. Retailers are trying to
improve distribution efficiencies and networks to take advantage of online
shopping growth in South Africa in furture, which is currently 1%.
PORTFOLIO OVERVIEW
HY2019 HY2018 FY2018
R'mil % R'mil % R'mil %
Direct Property 703 51 586 47 687 54
Global Investments 476 35 407 32 398 31
Cash , SA
investments and
other 199 14 267 21 196 15
Total Assets 1 378 100 1 260 100 1 281 100
Period end ZAR/US$
exchange rate 14.17 13.54 11.82
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. It has been an
active period with the take-on and leasing of the new world-class logistics
facilty at Airport City, the development of a new facilty for one of the
leading national hardware and building supply retailers at The Ridge
shopping centre and the filling of vacancies with high quality tenants. 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. Investment actions
during the second half of FY2018 and the start of this period was focused on
disposing of SA listed investments and the reinvestment of the proceeds in
global investments while the Rand was strong. While this has already started
benefiting growth in NAV, it does dilute the distributable income over the
short term but the Fund will benefit from these actions and see the positive
impact over the next two years.
REVIEW OF RESULTS AND OPERATIONS
Key points as at 30 September 2018
? Outstanding result with a strong operational performance
? Distribution including non-permissible income was 55.0 cents per unit
(HY2018: 53.8 cents)
? Upside from development capex incurred and additional offshore
investment which will contribute to distributable income going
forward
? The adoption of IFRS 9, through the Expected Credit Loss Model used
for calculating the doubtful debts provision, had an impact of
reducing distributable income by R0.6m (1.0 cents per unit)
? Excluding the impact of IFRS 9, distributable income increased by 12%
? Net Asset Value per unit is 2 168 cents per unit (HY2018: 2 105 cents)
? Intrinsic value return of 12.8% per annum since inception compared to
inflation of 5.9% per annum
HY2019 HY2018 FY2018
Distribution per unit including non-
permissible income (cents) 55.0 53.8 104.7
Distribution per unit excluding non-
permissible income (cents) 54.5 52.7 102.7
Property portfolio valuation (R’mil) 703 586 687
Investment in Offshore Listed
Properties(R’mil) 476 407 398
Investment in Local Listed Properties
and other current assets (R’mil) 51 87 55
Cash and cash equivalents (R’mil) 148 180 141
Net Asset Value per unit (cents) 2 168 2 105 2 059
Listed market price at year end
(cents) 2 100 2 000 2 060
Results Overview
HY
HY2019 HY2018 FY2018 2019/2018
(R'000) (R'000) (R'000) %
Direct property net income 24 388 22 012 45 442 11
Global Investment Income 5 959 5 678 11 234 4
Cash and Local Investment
Income 6 755 6 475 11 470 4
Shared expense (3 708) (3 370) (7 018) 10
Distributable Income incl
NPI 33 394 30 795 61 128 8
Average ZAR/US$ exchange
rate 13.96 13.23 12.99 6
During the period, the Fund made good progress in reducing vacancies and
improving tenant quality, which together with sound cost management
contributed positively towards distributable income for the period.
Outstanding performance from the direct property portfolio with an increase
of 11% in net income due to the filling of vacancies and healthy rental
growth.
The investment income earned from the global investments increased by 4%
over the period with the benefit of the weaker Rand to the US$ being partly
offset by lower US$ income due to a weaker Pound and Euro impacting
dividends from REITS domiciled in the UK and EU. The additional offshore
investment that was implemented when the Rand was strong, will deliver an
increased contribution going forward. Income received from the Oasis
Crescent Income Fund increased 7% due to the higher distributions as well as
a higher average balance held over the period. The higher shared 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.
Direct Property Portfolio Characteristics
Geographical Profile*
Rentable Revenue Revenue Revenue
Area HY2019 HY2018 FY2018
(m²) % (R'mil) % (R'mil) % (R'mil) %
Western Cape 87 546 83 27.4 63 23.4 60 48.8 60
KwaZulu-Natal 17 607 17 16.0 37 15.9 40 32.1 40
Total - Direct
Property (excl
straight-lining) 105 153 100 43.4 100 39.3 100 80.9 100
*Note: Revenue includes recoveries and excludes leasing incentives
The Fund concluded a lease agreement for the premises located in the Cape
Town Airport City Industrial Park with one of the leading global logistics
companies. This is an exciting opportunity which initiates a mutually
beneficial long-term relationship with a major multi-national player in the
logistics sector.
During the period, the Fund expanded it’s retail offering in KwaZulu-Natal
by completing a development for a major national retailer which will
contributed positively towards direct property income.
Segmental Profile
HY2019 HY2018 FY2018
Average Average Average
Rentable Average rental Average rental Average rental
area rental escalation rental escalation rental escalation
Segment (m²) per m² per m² (%) per m² per m² (%) per m² per m² (%)
Retail 24 187 110 7 114 8 109 8
Office 7 629 129 8 119 8 129 8
Industrial 73 337 35 7 30 7 31 7
Total 105 153
Like for like change in average retail rental per m² increased by 7% year
on year. The total year on year decrease of 3% is due to the change in
tenant mix as a result of securing high quality tenants on long term
leases. The increase in average industrial rental per m² was a result of
leases at favourable rentals.
Vacancy Profile*
% of total
rentable area HY2019 HY2018 FY2018
Retail 0.4 2.2 0.3
Office 0.0 0.0 0.0
Industrial 6.7 12.0 12.4
7.2 14.2 12.7
*Note: This relates only to the Direct Property Portfolio
% of total
rental income HY2019 HY2018 FY2018
Retail 0.8 4.4 0.6
Office 0.0 0.0 0.0
Industrial 2.8 5.6 8.7
3.6 10.0 9.3
*Note: This relates only to the Direct Property Portfolio
The industrial vacancy is due to the strategic vacancy to take advantage of
opportunities to enhance properties and improve the tenant mix.
Lease expiry profile
HY2019 HY2018 FY2018
Rental Revenue Rental Revenue Rental Revenue
Area % % Area % % Area % %
- Within 1 year 21 20 28 39 23 24
- Within 2 year 27 16 4 8 7 7
- Within 3 year 9 12 30 17 27 18
- Within 4 year 9 22 2 4 9 21
- Within 5 year
or more years 34 30 36 32 34 30
100 100 100 100 100 100
The lease expiry profile has improved relative to the prior period due to
the focus on longer term leases with high quality tenants. This remains a
high priority and further progress is expected for the remainder of the
year.
Tenant profile
HY2019 HY2018 FY2018
(%) (%) (%)
A - Large nationals, large listed, large
franchisees, multi-nationals and
government 86 76 71
B - Nationals, listed, franchisees and
medium to large professional firms 5 5 20
C - Other 9 19 9
TOTAL 100 100 100
**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 Oasis Crescent Global Equity Fund is focused on global REITS with high
quality properties and superior balance sheets that are well positioned to
outperform in a normalising interest rate environment. The Fund displays
very attractive valuation characteristics with an average cash flow yield of
6.7% and dividend yield of 5.1% which offers value relative to the average
bond yield and inflation at 2.6%.
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. 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 R0.739 million (HY2018: R0.680
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 R3.103 million
(HY2018: R2.783 million)
Units in issue
As at 30 September 2018 the number of units in issue was 61,219,094 (HY2018:
57,727,809)
Unitholder’s holding more than 5% of issued units as at 30 September 2018
Name Number of Units Holding (%)
Oasis Crescent Property Company (Pty) Ltd 7 807 926 12.8
Oasis Crescent Balanced Progressive Fund
of Funds 7 017 167 11.5
Oasis Crescent Equity Fund 6 739 222 11.0
Oasis Crescent Pension Annuity Stable Fund 6 550 623 10.7
Oasis Crescent Retirement Annuity High
Equity Fund 3 951 815 6.5
Oasis Crescent Balanced Stable Fund of Funds 3 855 520 6.3
35 922 273 58.8
Shareholding in Oasis Crescent Property Fund Managers (OCPFM)
OCPFM is 100% owned by Oasis Group Holdings (Pty) Ltd.
Changes to the Board
There were no changes to the board of directors during the 6 month period
ended 30 September 2018.
Distribution declaration and important dates
Notice is hereby given that a distribution after non-permissible income
in respect of the six months ended 30 September 2018 of 5 448.27909
cents for every 100 units held, has been declared payable to
unitholders recorded in the register of the Fund at close of business
on Friday, 30 November 2018. Unitholders may elect to receive the
distribution in cash or to reinvest the distribution at a rate of
2.51304 units at 2 168 cents per units (in aggregate) for every 100
units so held.
Unitholders should take note of the corporate action timetable as set out
below in respect of the above distribution and the election in terms
thereof:
2018
Declaration announcement on SENS of
Wednesday,
distribution and right of election
24 October
to purchase new units or receive a
cash payment
Circular and form of election Friday, 09
posted to unitholders November
Finalisation announcement on SENS Friday, 09
in respect of distribution and November
right of election to purchase new
units or receive a cash payment
Last day to trade in order to be Tuesday, 27
eligible for the distribution November
Trading commences ex-entitlement to Wednesday,
the distribution 28 November
Listing of maximum possible number Friday, 30
of units that may be purchased, at November
commencement of trade on
Closing date for the election of Friday, 30
cash distribution at 12:00 pm November
Record date Friday, 30
November
Cash distribution cheques posted Monday, 3
and CSDP/broker accounts updated December
with cash
Announcement of the results of the Monday, 3
distribution on SENS December
Unit certificates posted and Wednesday, 5
CSDP/broker accounts updated with December
units
Adjustment of number of new units Friday, 7
listed on or about December
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 Wednesday, 28
November 2018 and Friday, 30 November 2018, both days inclusive.
3. The above dates and times are subject to change. Any changes will be
announced on SENS.
4. All times quoted above 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.
Fractions
Trading in the electronic Strate environment does not permit fractions and
fractional entitlements in respect of units. Accordingly, should a
unitholder’s entitlement to new units, calculated in accordance with the
ratio mentioned above, give rise to a fraction of a new unit, such
fraction will be rounded down to the nearest whole number, resulting in
allocations of whole units and a payment to the unitholder in respect of
the remaining cash amount due to that unitholder under the distribution.
Foreign shareholders
The publication of this announcement and/or applicable documents and the
right to reinvest the distribution in jurisdictions other than South
Africa may be restricted by law and a failure to comply with any of these
restrictions may constitute a violation of the securities laws of any such
jurisdictions. OCPF units have not been and will not be registered for the
purposes of the election under the securities laws of the United Kingdom,
European Economic Area or EEA, Canada, United States of America, Japan or
Australia and accordingly are not being offered, sold, taken up, re-sold
or delivered directly or indirectly to recipients with registered
addresses in such jurisdictions.
Tax implications of the distribution
In respect of the distribution, the Manager hereby advises unitholders,
who will receive the distribution, that for taxation purposes, OCPF is
a REIT as defined in the Income Tax Act No. 58 of 1962, as amended
(“Income Tax Act”) as from 1 April 2013 and, accordingly, the tax
implications of the distribution have changed as from that date. The
distribution will not be exempt from income tax in terms of section
10(1)(k) of the Income Tax Act.
For South African tax residents, the distribution will be exempt from
dividends tax in terms of section 64F(l) of the Income Tax Act,
provided that you, as unitholder, provide the transfer secretary or
your nominee, custodian or CSDP with confirmation of your tax residence
status in the prescribed form. If you do not provide the required
residence status, they will have no choice but to withhold dividends
tax at a rate of 20%.
For non-resident unitholders, for South African tax purposes, the
distribution received by a non-resident unitholder from a REIT will be
subject to dividend withholding tax at 20%, unless the rate is reduced
in terms of any applicable agreement for the avoidance of double
taxation (“DTA”) between South Africa and the country of tax residence
of the unitholder. Non-resident unitholders that believe that a reduced
rate of tax applies in respect of their applicable DTA should contact
the transfer secretaries or their nominee, custodian or CSDP for the
prescribed form to record the reduced rate of tax.
Where dividends tax is withheld at 20%
- the reinvestment ratio for non-resident unitholders will be
2.01043 units at 2 168 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 4 358.62327 cents per 100 units held on the record
date.
Kindly contact the transfer secretaries, or your nominee, custodian or
CSDP for a copy of the prescribed declaration form.
The Income Tax Act sections applicable to the distributions made are as
follows:
• Property income distribution from a REIT – section 10(1)(k) and
section 64F(l)
Both resident and non-resident unitholders are encouraged to consult
their professional tax advisors with regard to their individual tax
liability in this regard.
Units in issue at the date of declaration of the distribution: 61 219
094
Income tax reference number: 3354212148
A circular will be posted to unitholders on or about 9 November 2018 in
respect of the income and unit distribution.
By order of the Board
Oasis Crescent Property Fund Managers Ltd.
Cape Town
24 October 2018
Designated Advisor
PSG Capital (Pty) Ltd.
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