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 2019
as follows:
Consolidated statement of financial position as at 31 March 2019
Audited Audited
2019 2018
R’000 R’000
Assets
Non-current assets 1 253 278 1 118 910
Investment properties 720 074 668 997
Property, plant and equipment 111 291
Straight-line lease accrual 18 042 17 067
Financial assets at fair value
through profit or loss 515 051 -
Available-for-sale financial assets - 432 555
Current assets 174 810 161 685
Trade receivables 3 912 4 097
Other receivables 8 775 7 103
Straight-line lease accrual 1 859 611
Other financial assets at fair value
through profit or loss 146 154 138 519
Other short-term financial assets 8 699 8 368
Cash and cash equivalents 5 411 2 987
Total assets 1 428 088 1 280 595
Unitholders’ funds and liabilities
Unitholders’ funds 1 373 697 1 235 374
Capital of the Fund 858 531 806 713
Retained income 35 109 25 880
Fair value movements on financial assets
reserve 200 512 -
Other reserves 279 545 402 781
Current liabilities 54 391 45 221
Trade payables 13 364 11 574
Accruals 518 448
Other payables 3 310 2 250
Trade payables to related parties 1 187 921
Unitholders for distribution 35 913 30 014
Non-permissible income available for
dispensation 99 14
Total unitholders’ funds and
liabilities 1 428 088 1 280 595
Consolidated statement of comprehensive income for the year ended 31
March 2019
Audited Audited
2019 2018
Restated
R’000 R’000
Income 116 225 106 135
Rental and related income 87 245 79 758
Income from investments (excluding non-
permissible income and fair value
adjustments) 26 757 22 575
Straight-lining of lease income 2 223 3 802
Expenses 45 146 41 823
Property expenses 37 467 34 314
Service charges 6 343 5 800
Other operating expenses 1 336 1 709
Net income from rentals and
investments 71 079 64 312
Fair value adjustment to investment
properties excluding straight-
lining of lease income 28 836 38 289
Fair value adjustment to investment
properties 31 059 42 091
Straight-lining of lease income (2 223) (3 802)
Profit for the period before fair value
adjustments to financial assets and
realised gains 99 915 102 601
Fair value adjustments and realised gains
on investments 55 446 16 652
Realised gain on disposal of available-
for-sale financial assets - 16 523
Fair value adjustments on financial assets
at fair value through profit or loss 53 583 -
Fair value adjustments on other financial
assets at fair value through profit or
loss 1 722 77
Fair value adjustments on other short-term
financial assets 141 52
Operating profit for the year 155 361 119 253
Net non-permissible income (155) (531)
Non-permissible investment income 386 618
Non-permissible income dispensed (541) (1 149)
Net profit for the year 155 206 118 722
Other comprehensive income
Items that may subsequently be
reclassified to profit or loss - (52 093)
Fair value (loss)/gain on available-for-
sale financial assets - (35 570)
Realised gain on disposal of available-
for-sale financial assets - (16 523)
Total comprehensive income for
the year 155 206 66 629
Basic and diluted earnings per
unit (cents) 252.9 203.4
Additional information:
Headline earnings and distribution income
reconciliation
Basic earnings before non-permissible
income adjustment 155 361 119 253
Non-permissible investment income 386 618
Basic Earnings after non-permissible
income adjustment 155 747 119 871
Non-permissible income dispensed (541) (1 149)
Basic Earnings 155 206 118 722
Adjusted for:
Realised gain on disposal of available-
for-sale financial assets - (16 523)
Fair value adjustment to investment
properties (28 836) (38 289)
Headline earnings 126 370 63 910
Less: Fair value adjustments on financial
assets at fair value through profit or
loss (53 583) -
Less: Fair value adjustments on other
financial assets at fair value through
profit or loss (1 722) (77)
Less: Fair value adjustments on other
short-term financial assets (141) (52)
Less: Straight-line lease accrual (2 223) (3 802)
Distribution income excluding non-
permissible income 68 701 59 979
Distribution received in advance 547 460
Income distributed 69 249 60 439
Basic earnings and diluted earnings per
unit (cents) 252.9 203. 4
Headline earnings and diluted headline
earnings per unit (cents) 205.9 109.5
Distribution per unit including non- 112.8 104.7
permissible income (cents)
Distribution per unit excluding non-
permissible income (cents) 111.9 102.7
Weighted average units in issue 61 379 349 58 382 990
Units in issue at the end of the year 62 484 150 59 992 811
Consolidated statement of changes in unitholders’ funds for the year
ended 31 March 2019
Fair
Value
Movements
On
Capital Financial
of the Assets Other Retained
Fund Reserve Reserves Income Total
R’000 R’000 R’000 R’000 R’000
Balance at 1 April
2017 736 401 - 412 023 9 988 1 158 412
Net profit for the
year
ended 31 March 2018 - - - 118 722 118 722
Other comprehensive
income
Fair value loss on
available-for-sale
financial assets - - (35 570) - (35 570)
Realised gain on
disposal of
available for sale
financial assets - - (16 523) - (16 523)
Total comprehensive
income for the year
ended 31 March 2018 - - (52 093) 118 722 66 629
Issue of units 51 033 - - - 51 033
Units issued for
property
acquisitions 20 000 - - - 20 000
Transaction costs
for issue of new
units (261) - - - (261)
Transfer to non-
distributable
reserve - - 42 851 (42 851) -
Distribution
received
in advance (460) - - 460 -
Distribution to
unitholders - - - (60 439) (60 439)
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
year
ended 31 March 2019 - - - 155 206 155 206
Total comprehensive
income for the year
ended 31 March 2019 - - - 155 206 155 206
Issue of units 52 676 - - - 52 676
Transaction costs
for
issue of new units (311) - - - (311)
Fair value
adjustment on
investment property
transferred to
non distributable
reserve - - 31 059 (31 059) -
Fair value movements
on financial assets
transferred to non
distributable
reserve - 207 877 - (207 877) -
Realised gains on
sale of listed
equity investment
transferred to
retained income - (7 365) - 7 365 -
Distribution
received
in advance (547) - - 547 -
Distribution to
unitholders - - - (69 248) (69 248)
Balance at 31 March
2019 858 531 200 512 279 545 35 109 1 373 697
Distributions declared for the year amounted to 111.9 cents (2018: 102.7
cents) per unit.
Consolidated statement of cash flows for the year ended 31 March 2019
Audited Audited
2019 2018
R’000 R’000
Cash flows from operating activities
Net profit for the year 155 206 118 722
Adjusted for:
Non-permissible investment income received (386) (618)
Depreciation 180 198
Provision for receivables impairment 136 (312)
Straight-line lease accrual (2 223) (3 802)
Movement in lease incentives (1 507) 962
Realised gain on sale of financial assets - (16 523)
Fair value adjustment on financial assets
at fair value through profit or loss (53 583) -
Fair value adjustment on other financial
assets at fair value through profit or loss
and other short-term financial assets (1 863) (129)
Fair value adjustment on investment
properties excluding straight-lining of
lease income (28 836) (38 289)
Net operating cash flow before changes in
working capital 67 124 60 210
Decrease/(increase) in current assets
Trade receivables 49 1 453
Other receivables (1 672) (1 615)
Increase/(decrease) in current liabilities
Trade payables 1 790 327
Accruals 70 (3)
Other payables 1 060 (678)
Trade payables to related parties 266 (516)
Cash generated from operations 68 687 59 179
Non-permissible investment income received 386 618
Unitholders for distribution (10 673) (8 827)
Non-permissible income 85 (136)
Net cash inflow from operating activities 58 485 51 834
Cash flows from investing activities
Acquisition of available-for-sale
financial assets - (61 289)
Acquisition of financial assets at fair
value through profit or loss (47 660) -
Acquisition of investment in subsidiary - (36 247)
Acquisition of other financial assets at fair
value through profit or loss (5 913) (20 937)
Capital expenditure on investment properties (20 734) (4 117)
Acquisition of other short-term financial
assets (1 298) (1 873)
Proceeds from disposal of available-for-sale
financial assets - 52 061
Proceeds from disposal of other financial
assets at fair value through profit or loss 1 108 18 921
Proceeds from disposal of financial assets at
fair value through profit or loss 18 747 -
Acquisition of property, plant and equipment - (54)
Net cash outflow from investing activities (55 750) (53 537)
Cash flows from financing activities
Transaction cost for issue of new units (311) (261)
Net cash outflow from financing activities (311) (261)
Net increase/(decrease) in cash and
cash equivalents 2 424 (2 964)
Cash and cash equivalents
At the beginning of the year 2 987 5 951
At the end of the year 5 411 2 987
Segmental information for the year ended 31 March 2019
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 income 27 491 12 643 25 435 - - 65 569
Recoveries 13 464 2 140 6 072 - - 21 676
Rental and related
income 40 955 14 783 31 507 - - 87 245
Income from
investments
(excluding non-
permissible
income and fair value
adjustments)
Dividend income
- offshore - - - 13 395 - 13 395
Permissible
investment
income -
domestic - - - 13 362 - 13 362
- - - 26 757 - 26 757
Straight-lining of
lease income 428 863 933 - - 2 223
Income 41 382 15 646 32 440 26 757 - 116 225
Segment expenses
Property
Expenses (excluding
provision for
receivables impairment) 23 782 5 321 8 228 - - 37 331
Provision for
receivables impairment 7 (6) 135 - - 136
Service charges - - - - 6 343 6 343
Other operating
expenses - - - 172 1 164 1 336
Expenses 23 789 5 315 8 363 172 7 507 45 146
Net income from rentals
and investments 17 594 10 331 24 077 26 585 (7 507) 71 079
Fair value adjustment
to investment
properties excluding
straight-lining of
lease income 9 341 4 215 15 280 - - 28 836
Segment result
Profit for the period
before fair value
adjustments to
financial assets 26 935 14 545 39 357 26 585 (7 507) 99 915
Fair value adjustments
on financial assets
Fair value adjustments
on financial assets at
fair value through
profit or loss - - - 53 583 - 53 583
Fair value adjustments
on other financial
assets at fair value
through profit or loss - - - 1 722 - 1 722
Fair value adjustments
on other short-term
financial assets - - - 141 - 141
- - - 55 446 - 55 446
Operating profit for
the year 26 935 14 545 39 357 82 031 (7 507) 155 361
Net finance
income
Non-permissible
investment income - - - 55 331 387
Non-permissible
investment dispensed (155) - - (55) (331) (541)
(155) - - - - (155)
Net profit for the year 26 780 14 545 39 357 82 031 (7 507) 155 206
Segment assets
Investment
properties 280 124 136 742 303 209 - - 7720 074
Property, plant
and equipment 111 - - - - 111
Straight-line
lease accrual
non-current 7 431 3 033 7 577 - - 18 042
Straight-line
lease accrual
current 897 22 940 - - 1 859
Financial assets at
fair value through
profit or loss - - - 515 051 - 515 051
Other short term
financial assets 4 678 91 3 930 - - 8 699
Trade receivables 2 719 350 457 - 387 3 912
Other receivables 1 807 659 2 340 3 936 33 8 775
Other financial assets
at fair value
through profit
or loss - - - 146 154 - 146 154
Cash and cash
equivalents - - - 5 411 - 5 411
297 766 140 898 318 452 670 552 419 1 428 088
Segment
liabilities
Trade payables 8 023 600 4 695 - 46 13 364
Accruals 37 11 52 - 419 518
Other payables 686 1 119 952 - 553 3 310
Trade payables
to related
parties 214 2 333 6 632 1 187
Unitholders for
distribution - - - - 35 913 35 913
Non-permissible - - - - 99 99
income
available for
dispensation
8 960 1 732 6 032 6 37 663 54 391
Net current segment
assets/(liabilities) 1 141 (612) 1 633 155 495 (37 243) 120 419
Capital
Expenditure incurred
(incl. Property, plant
and equipment) 19 716 627 390 - - 20 734
Segmental information for the year ended 31 March 2018
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 income 26 282 11 518 21 686 - - 59 486
Recoveries 13 079 2 437 4 756 - - 20 272
Rental and related
income 39 361 13 955 26 442 - - 79 758
Income from investments
(excluding non-
permissible income and
fair value adjustments)
Dividend income
- offshore - - - 11 233 - 11 233
Permissible
investment
income -
domestic - - - 11 342 - 11 342
- - - 22 575 - 22 575
Straight-lining of
lease income 837 2 005 960 - - 3 802
Income 40 198 15 960 27 402 22 575 - 106 135
Segment expenses
Property expenses
(excluding Provision
for receivables
impairment) 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
Net income from rentals
and investments 19 162 10 957 19 127 22 085 (7 019) 64 312
Fair value adjustment
to investment
properties excluding
straight-lining of
lease income 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 20 449 34 341 22 085 (7 019) 102 601
Fair value adjustments
and realised gains on
financial assets
Fair value adjustments
on other financial
assets at fair value - - - 77 - 77
through profit or loss
Fair value adjustments
on other short-term
financial assets - - - 52 - 52
Realised gain on sale
of available-for-sale
financial assets - - - 16 523 - 16 523
- - - 16 652 - 16 652
Operating profit for
the year 32 745 20 449 34 341 38 737 (7 019) 119 253
Net finance
income
Non-permissible
investment income - - - 121 497 618
Non-permissible income
dispensed (532) - - (120) (497) (1 149)
(532) - - 1 - (531)
Net profit for the year 32 213 20 449 34 341 38 738 (7 019) 118 722
Segment assets
Investment
properties 251 766 131 876 285 355 - - 6668 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 1 280 594
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
distribution - - - - 30 014 30 014
Non-permissible
income
available for
dispensation - - - - 14 14
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 (including
Property, plant and
equipment) 3 627 - 544 - - 4 171
Commentary
Basis of preparation and accounting policies
The summary consolidated financial statements are prepared in accordance
with the requirements of the JSE Limited 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 consolidated
financial statements from which the summary consolidated 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 consolidated 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
consolidated annual financial statements of the Fund.
The consolidated financial statements are prepared on the historical cost
basis as modified by the revaluation of investment properties and
financial assets at fair value through profit or loss.
These summary consolidated financial statements for the year ended 31
March 2019 have been audited by PricewaterhouseCoopers Inc., who
expressed an unmodified opinion thereon. The auditor also expressed an
unmodified opinion on the annual financial statements from which these
summary consolidated financial statements were derived.
A copy of the auditor’s report on the summary consolidated financial
statements and of the auditor’s report on the annual consolidated
financial statements are available for inspection at the company’s
registered office, together with the financial statements identified in
the respective auditor’s reports.
These summary audited results were compiled by the financial director,
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. The auditor’s report does not necessarily report on all of the
information contained in this announcement/financial results. Unitholders
are therefore advised that in order to obtain a full understanding of the
nature of the auditor’s engagement they should obtain a copy of the
auditor’s report together with the accompanying financial information
from the issuer’s registered office.
Changes in accounting policies
The consolidated financial statements have been prepared in accordance
with International Financial Reporting Standards on a basis consistent
with the prior period except for the adoption of the following new or
revised standards.
Application of IFRS 9 Financial Instruments
In the current period, the group has applied IFRS 9 Financial Instruments
(as revised in July 2014) and the related consequential amendments to
other IFRSs. IFRS 9 replaces IAS 39 Financial Instruments and introduces
new requirements for:
? Classification and measurement of financial assets and financial
liabilities; and
? Impairment for financial assets.
Details of these new requirements as well as their impact on the group's
financial statements are described below.
The group has applied IFRS 9 in accordance with the transition provisions
set out in IFRS 9.
Classification and measurement of financial assets
The date of initial application (i.e. the date on which the group has
assessed its existing financial assets and financial liabilities in terms
of the requirements of IFRS 9) is 01 April 2018. Accordingly, the group
has applied the requirements of IFRS 9 to instruments that have not been
derecognised as at 01 April 2018 and has not applied the requirements to
instruments that have already been derecognised as at 01 April 2018.
Comparatives in relation to instruments that have not been derecognised
as at 01 April 2018 have been restated.
All recognised financial assets that are within the scope of IFRS 9 are
required to be subsequently measured at amortised cost or fair value on
the basis of the entity’s business model for managing the financial
assets and the contractual cash flow characteristics of the financial
assets.
The measurement requirements are summarised below:
? Debt investments that are held within a business model whose objective
is to collect the contractual cash flows, and that have contractual cash
flows that are solely payments of principal and interest on the principal
amount outstanding, are subsequently measured at amortised cost.
? Debt investments that are held within a business model whose objective
is both to collect the contractual cash flows and to sell the debt
instruments, and that have contractual cash flows that are solely
payments of principal and interest on the principal amount outstanding,
are subsequently measured at fair value through other comprehensive
income.
? All other debt investments and equity investments are subsequently
measured at fair value through profit or loss, unless specifically
designated otherwise.
The group may irrevocably designate a debt investment that meets the
amortised cost or fair value through other comprehensive income criteria
as measured at fair value through profit or loss if doing so eliminates
or significantly reduces an accounting mismatch.
When a debt investment measured at fair value through other comprehensive
income is derecognised, the cumulative gain or loss previously recognised
in other comprehensive income is reclassified from equity to profit or
loss as a reclassification adjustment. In contrast, for an equity
investment designated as measured at fair value through other
comprehensive income, the cumulative gain or loss previously recognised
in other comprehensive income is not subsequently reclassified to profit
or loss.
Debt instruments that are subsequently measured at amortised cost or at
fair value through other comprehensive income are subject to new
impairment provisions using an expected loss model. This contrasts the
incurred loss model of IAS 39.
The group does not hold any debt instruments.
The directors reviewed and assessed the group's existing financial assets
as at 01 April 2018 based on the facts and circumstances that existed at
that date and concluded that the initial application of IFRS 9 has had
the following impact on the group's financial assets as regards to their
classification and measurement:
Reconciliation of the reclassifications and remeasurements of financial
assets as a result of adopting IFRS9
Original New
classificatio classificatio
n under IAS n under IFRS
39 9
Available- Financial
for-sale assets
financial through
assets profit and
loss
R'000 R'000
Oasis Crescent Global Property Equity Fund 374 946 374 946
Oasis Crescent International Property Equity
Feeder Fund 22 885 22 885
Listed property instruments 34 724 34 724
432 555 432 555
Application of IFRS 15 Revenue from Contracts with Customers
The impact of IFRS 15 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
Audited 12 Audited 12
months to 31 months to 31
March 2019 March 2018
R'000 R'000
Income
Income from investments excluding non-
permissible income (as previously reported) 28 620 39 227
Less: Amounts now shown separately
Realised gain on disposal of available-for-
sale financial assets - 16 523
Fair value adjustment on financial assets at
fair value through profit or loss 1 863 129
Income from investments (excluding non-
permissible income and fair value movements)
as restated 26 757 22 575
Basic earnings and diluted earnings per unit
(cents) (unchanged) 252.9 203.4
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.
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 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.
Financial highlights
Distribution per unit including non-permissible income was 112.8 cents
per unit (FY2018: 104.7 cents) delivering solid growth of 8%
Continued improvement in the tenant profile and lease expiry profile
Net Asset Value per unit is 2,198 cents per unit (FY2018: 2,059 cents)
showing growth of 7%
Intrinsic value return of 12.6% per annum since inception compared to
inflation of 5.8% per annum
2019 2018
Distribution per unit including non-permissible
income (cents) 112.8 104.7
Distribution per unit excluding non-permissible
income (cents) 111.9 102.7
Property portfolio valuation(Rm) 740 687
Investment in Offshore Listed Properties (Rm) 507 398
Investments in Local Listed Properties and other
current assets(Rm) 33 55
Net asset value per unit (cents) 2 198 2 059
Listed market price at year end (cents) 2 100 2 060
Movement in investment properties: R’000 R’000
Carrying value at the beginning of the year 668 997 571 874
Acquisitions during the period - 55 679
Subsequent capitalised expenditure 20 734 4 117
Movement in lease incentives 1 507 (962)
Fair value adjustment to investment properties
excluding straight-lining of lease income 28 836 38 289
Revaluation 31 059 42 091
Change in straight-line lease accrual (2 223) (3 802)
Carrying value at the end of the year 720 074 668 997
The valuation of investment properties includes 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, void 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 2019 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 7.70% and 10.50% (2018: 7.5% 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.
Fair value estimation:
IFRS 13 requires that an entity discloses for each class of assets and
liabilities measured at fair value, the level in the fair value hierarchy
into which the fair value measurements are categorised in their entirety.
The fair value hierarchy reflects the significance of the inputs used in
making fair value measurements.
The fair value hierarchy has the following levels:
- 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 2019:
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 - 442 668 - 442 668
Investment in listed property
funds 8 342 - - 8 342
Investment in Oasis Crescent
International Property Equity
Feeder Fund - 64 041 - 64 041
Other financial assets at fair
value through profit or loss
Investment in Oasis Crescent
Income Fund - 146 154 - 146 154
Other short-term financial assets - 8 699 - 8 699
Investment property
Investment property - - 720 074 720 074
The following table presents the Fund's assets and liabilities 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
Financial assets at fair value
through profit or loss
Investment in Oasis Crescent Income
Fund - 138 519 - 138 519
Other short-term financial assets - 8 368 - 8 368
Investment property
Investment property - - 668 997 668 997
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 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
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.
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 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.
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 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 (Fund) is a well-diversified REIT invested
in South African direct and listed property investments and high quality
global listed REITs with no debt and substantial reserves, which provides
flexibility to take advantage of opportunities.
The Fund’s direct property portfolio is well positioned to take advantage
of a recovery in growth in the South African Economy, with the majority of
the portfolio situated in the Western Cape which has the best property
fundamentals in South Africa. The Fund is well placed to take advantage of
long-term growth in the logistics sector and continues to target national
and multi-national players in this sector. The increase in the percentage
of national and multi-national tenants from 71% of tenants in 2018 to the
current level of 81% reflects the high tenant quality.
The objective of the Manager is to protect and grow the real wealth of
investors by providing sustainable growth in NAV and delivering a
consistent income stream that has potential to grow. Our focused approach
has delivered significant real wealth creation for investors with an
annualised total unitholder return of 12.5% relative to annualised
inflation of 5.8% since inception, resulting in a real return of 6.7%. Your
Fund’s annualised total intrinsic value return is 12.6% per annum since
inception.
Cumulative returns Since 2019 2018 2017 2016 2015 2014
Inception
Unitholder return 382.9 382.9 349.7 321.1 286.3 227.3 165.3
Intrinsic value 387.7 387.7 334.7 312.2 302.8 248.7 194.6
return
Inflation 111.4 111.4 103.1 95.2 83.7 71.7 65.2
Annual returns Since
Inception 2019 2018 2017 2016 2015 2014
Unitholder return 12.5 7.4 6.8 9.0 18.0 23.4 17.4
Intrinsic value 12.6 12.2 5.4 2.3 15.5 18.4 12.9
return
Inflation 5.8 4.1 4.0 6.3 7.0 3.9 5.9
Market Price 2 100 2 060 2 025 1 950 1 750 1 500
NAV 2 198 2 059 2 050 2 101 1 919 1 706
MARKET OVERVIEW
The statements by both the US Federal Reserve and the European Central Bank
that there will be no rate hikes in 2019 have impacted positively on Global
REITS. New supply in the global developed property markets has remained
disciplined and net absorption remains positive in most of the markets.
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 South Africa, the requirement for supply chain efficiency remains a
positive driver of demand for logistics space in the industrial sector
while shopping centres that are appealing destinations or offer convenience
are better positioned to grow their trading densities and rentals in a more
competitive environment. The demand for South African office space is
linked to confidence and the employment outlook, which is going to take
time to recover. Our portfolio takes into consideration the risks related
to the SA property sector.
PORTFOLIO OVERVIEW
2019 2018 2017
R'mil % R'mil % R'mil %
Direct Property 740 52 687 54 586 49
Global Investments 507 35 398 31 377 31
Cash, SA
Investments and
other 181 13 196 15 240 20
Total Assets 1 428 100 1 281 100 1 203 100
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. A newly developed retail offering, located at The Ridge, KwaZulu-
Natal, was completed during this period. This development introduces
another retail category at The Ridge which will contribute towards
attracting more shoppers to the mall. 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 Global 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.
2019 2018 2017 2019/2018 2019/2017
(R'000) (R'000) (R'000) % %
Direct
property net
income 49 624 44 911 42 066 10 9
Global
Investment
Income 13 396 11 234 10 788 19 12
Cash and Local
Investment
Income 13 189 10 853 8 320 22 29
Shared expense (7 508) (7 018) (6 441) 7 8
Distributable
Income excl.
NPI 68 701 59 980 54 733 15 13
During the period, the Fund took the opportunity to renew leases with key
tenants and entered into leases with major national tenants, which has
contributed positively towards direct property income. Filling of
vacancies at favorable rates contributed 5% towards the increase in
direct property net income with escalations contributing a further 5%.
The investment income earned from the global investments increased by 4%
due to an 8% increase in the US$ distribution and a 5% increase in the
number of units, offsetting the Rand strengthening by 9%. The 8% increase
in the distribution per unit in US$ from the Oasis Crescent Global
Property Equity Fund was driven by the average distribution growth of 5%
at the REIT level and the benefit from a stronger Pound, Euro and Rand to
the US Dollar. Cash and local investment income benefited from additional
investments and a significant increase in the cash flow yield of the
Oasis Crescent Income Fund during the current financial period. SA listed
property investment income was lower due to the recycling of investments.
The investment income earned from the global investments increased by 19%
and benefited from a weaker Rand. Cash and local investment income
benefited from additional investments and a significant increase in the
cash flow yield of the Oasis Crescent Income Fund during the current
financial period. SA listed property investment income was lower due to
the recycling of investments. 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
higher average unit price during the period. 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 2019 2018
Area (m²) % (R'mil) % (R'mil) %
Western Cape 87 546 83 56.4 63 48.8 60
KwaZulu-Natal 17 607 17 32.9 37 32.1 40
Total - Direct Property
(excl. straight lining) 105 153 100 89.3 100 80.9 100
Note: Revenue includes recoveries and excludes leasing incentives
Segmental Profile
2019 2018
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) R m² (%) R m² (%)
Retail 24 187 111 7 109 8
Office 7 629 139 8 129 8
Industri
al 73 337 36 8 31 7
TOTAL 105 153
Like for like change in average retail rental per m² increased by 6% year
on year. The total year on year increase of 2% is due to the change in
tenant mix as a result of securing high quality tenants on long term
leases. Average office rental per m² increased in line with annual rental
escalations. Like for like change in average industrial rental per m²
increased by 7% year on year. The total year on year increase of 16% is
due to the Fund leasing the new modern logistics facility which was
acquired during the prior period at a rental above the average rental at
other premises.
Vacancy Profile
% of total rentable area 2019 2018
Retail 1.9 0.3
Office 0.0 0.0
Industrial 12.9 12.4
Note: This relates only to the Direct Property Portfolio
% of total rentable income 2019 2018
Retail 2.8 0.6
Office 0.0 0.0
Industrial 8.6 8.7
Note: This relates only to the Direct Property Portfolio
During the period, the Fund was impacted by partial vacancy as short term
leases came to an end. This impact was offset by active asset management
through tactical filling of vacancies and the development of an
additional retail offering at The Ridge.
Lease Expiry Profile
2019 2018
Rental Area Revenue Rental Area Revenue
% % % %
- Within 1 year 15 16 23 24
- Within 2 years 26 17 7 7
- Within 3 years 16 30 27 18
- Within 4 years 1 2 9 21
- Within 5 years or more
years 42 35 34 30
100 100 100 100
Tenant Profile
2019 2018
(%) (%)
A - Large nationals, large listed, large franchisees,
multi-nationals and government 87 71
B - Nationals, listed, franchisees and medium to large
professional firms 4 20
C - Other 9 9
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.
There has been a significant improvement in the tenant profile due to the
leasing efforts of the team.
Investment Portfolio Characteristics
The investment in high quality global listed REITs provides geographic and
sector diversification. The Oasis Crescent Global Property Equity Fund
displays very attractive valuation characteristics with an average cash
flow yield of 6.8% and dividend yield of 5.0% which offers value relative
to the average bond yield of 2.1% and inflation at 1.7%.
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 strategy of The Manager is to ensure a high quality Portfolio with low
vacancies and a tenant profile increasingly focused on large,
institutional, national or multinational tenants. Going forward, we remain
focused on the lease expiry profile and will look to renew or replace
leases in line with our leasing strategy. The fund will continue to look to
take advantage of acquisition or development opportunities in line with our
strategy of diversifying and growing our income profile. The newly
developed retail offering at The Ridge further enhances the property
portfolio and will contribute towards improving the tenant mix by
attracting high quality tenants.
ADDITIONAL INFORMATION
Property management
Property management is outsourced to the Manager and external service
providers. The amount paid to the Manager was R1.54 million (FY2018: R1.39
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 R6.34 million
(FY2018: R5.80 million).
Units in issue
As at 31 March 2019 the number of units in issue was 62,484,150 (FY2018:
59,992,811).
Unitholders holding more than 5% of issued units as at 31 March 2019:
NUMBER OF HOLDING
NAME UNITS (%)
Oasis Crescent Property Company
(Pty) Ltd. 7 807 926 12.5
Oasis Crescent Equity Fund 7 773 859 12.4
Oasis Crescent Balanced Progressive
Fund of Funds 7 193 511 11.5
Oasis Crescent Pension Annuity
Stable Fund 7 065 304 11.3
Oasis Crescent Balanced Stable Fund
of Funds 3 952 410 6.3
Oasis Crescent Retirement Annuity
High Equity Fund 3 752 511 6.0
Total 37 545 521 60.0
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.
Management fees payable to Oasis Crescent Property Fund Managers Limited
(“the Manager”) represent 0.5% per annum of the Fund’s market
capitalisation and borrowing facilities based on the average daily
closing price of the units. The management fee is calculated and payable
monthly based on the average daily closing price of the Fund as recorded
by the JSE Limited and the average daily extent of any long term
borrowings. Management fees are recognised monthly as and when the
services are performed.
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 that fund.
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 Limited, the manager of that fund.
Abli Property Developers Proprietary Limited renders property development
consulting services to the Fund on capital development projects.
Oasis Asset Management Limited renders investment management services to
the Fund on financial assets at fair value through profit or loss.
Oasis Crescent Property Company (Pty) Limited renders services relating
to identifying and securing tenants for the Fund.
There are common directors to Oasis Crescent Property Fund Managers
Limited, Oasis Group Holdings Proprietary Limited, Oasis Crescent
Property Company (Pty) Limited, Oasis Global Management Company (Ireland)
Limited, Oasis Crescent Management Company Limited, Oasis Asset
Management and Abli Property Developers Proprietary Limited. Transactions
with related parties are executed on terms no less favourable to the Fund
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
2019 2018
R’000 R’000
Service charge paid to Oasis Crescent Property Fund
Managers Limited 6 343 5 800
Property management fees paid to Oasis Crescent
Property Fund Managers Limited 1 539 1 392
Rental and related income from Oasis Group
Holdings Proprietary Limited at The
Ridge@Shallcross 503 461
Rental and related income from Oasis Group
Holdings Proprietary Limited at 24
Milner Road 918 840
Letting commission paid to Oasis Crescent Property
Company (Pty) Limited for securing tenants 780 1 162
Property related expenses paid to Oasis Crescent
Property Company (Pty) Limited 904 306
Consulting fees paid to Abli Property Developers
Proprietary Limited for consulting services on
capital projects 468 87
Investment management fees paid to Oasis
Asset Management 172 490
Related party balances
Trade payables to Oasis Crescent Property Fund
Managers Limited (823) (743)
Trade payables to Oasis Group Holdings Proprietary
Limited (101) (74)
Trade payables to Oasis Crescent Property Company
(Pty) Limited (157) (58)
Trade payables to Oasis Asset Management (6) (27)
Trade payables to Abli Property Developers
Proprietary Limited (99) (19)
In the current reporting period, the Fund issued 2.491 million units upon
reinvestment of distributions. 1.226 million units were issued in June
2018 at 2,059 cents per unit and 1.265 million units were issued in
December 2018 at 2.168 cents per unit.
Declaration announcement in respect of distribution for the 6 months
ended 31 March 2019.
Notice is hereby given that a distribution for the six-month period ended
31 March 2019 has been approved and declared of 5 744.54790 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
close of business on Friday, 7 June 2019. Unitholders may elect to
receive the distribution in cash or to reinvest the distribution by the
purchase of new units at a rate of 2.61353 units at 2 198 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 2019
Declaration announcement on SENS of distribution Monday, 29 April
and right of election to purchase new units or
receive a cash payment
Circular and form of election posted to Friday, 17 May
unitholders
Finalisation announcement on SENS in respect of Friday, 17 May
distribution and right of election to purchase
new units or receive a cash payment
Last day to trade in order to be eligible for the Tuesday, 4 June
distribution
Trading commences ex- entitlement to the Wednesday, 5 June
distribution
Listing of maximum possible number of units that Friday, 7 June
may be purchased at commencement of trade on
Closing date for the election of cash Friday, 7 June
distribution at 12:00 pm on
Record date for the distribution Friday, 7 June
Cash distribution cheques posted and CSDP/broker Monday, 10 June
accounts updated with cash
Announcement of the results of the distribution Monday, 10 June
on SENS
Unit certificates posted and CSDP/broker accounts Wednesday, 12 June
updated with units
Adjustment of number of new units listed on or Friday, 14 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 Wednesday,
5 June 2019 and Friday, 7 June 2019, 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
In respect of the distribution, the manager hereby informs unitholders,
who will receive the distribution, that for taxation purposes, OCPF is a
REIT as defined in the 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% for non-resident unitholders:
- the reinvestment ratio for non-resident unitholders will be 2.09083
units at 2 198 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 4 595.63832 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.
A circular will be posted out to unitholders on Friday, 17 May 2019, in
respect of the unit and income distribution.
The number of units in issue at the date of the aforesaid distribution is
62 484 150. The income tax reference number of the Fund is 3354212148.
By order of the board
Oasis Crescent Property Fund Managers Limited
Cape Town
29 April 2019
PSG Capital Proprietary Limited
Designated Adviser
Date: 29/04/2019 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.