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Summarised consolidated financial results for the year ended 31 December 2019 and cash dividend declaration
SA Corporate Real Estate Limited
(Incorporated in the Republic of South Africa)
(Registration number 2015/015578/06)
Approved as a REIT by the JSE
Share Code: SAC
ISIN Code: ZAE000203238
("SA Corporate" or the "Company" or the "Group")
SUMMARISED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2019 AND CASH DIVIDEND DECLARATION
Introduction
SA Corporate Real Estate Limited is a JSE-listed Real Estate Investment Trust ("REIT") which owns a diversified portfolio of quality
industrial, retail, commercial and residential buildings located primarily in the major metropolitan areas of South Africa with
a secondary node in Zambia. The property portfolio consists of 193 properties, with 1 627 236 m2 of lettable area, valued at R17,4bn,
and a 50% joint venture in 3 Zambian properties valued at R930,6m.
Overview
- Annual distribution of 38.04cps (2018: 42.22cps), a decline of 9.9%
- Total distributable income of R960,0m (2018: R1 068,2m)
- Total net property income of R1,35bn (2018: R1,43bn)
- Total like-for-like net property income declined by 1.5% to R944,6m (2018: R959,2m)
- Loan to value of 37.9% (2018: 34.6%)
- R4,6bn of debt refinanced at a weighted average margin of 1.77% above 3-month JIBAR
Salient features
The audited summarised consolidated financial results for the year ended 31 December 2019, as compared to the year ended 31 December 2018,
are set out below:
- Revenue of R2 283,9m (2018: R2 309,5m)
- Operating income of R1 301,3m (2018: R1 401,3m)
- Headline earnings per share of 34.73 cents (2018: 37.42 cents)
- Earnings per share of 9.32 cents* (2018: 33.50 cents)
- Net asset value per share of 477 cents (2018: 508 cents)
- Annual distribution per share of 38.04 cents (2018: 42.22 cents)
* Decline primarily due to movement in property valuations to -22.31 cents
Distribution declaration and important dates
Notice is hereby given of the declaration of distribution - no. 10 in respect of the income distribution period 1 July to 31 December 2019.
The distribution amounts to 17.66cps (2018: 20.52cps).
The source of the distribution comprises net income from property rentals. Please refer to the statement of comprehensive income
for further details. 2 514 732 095 SA Corporate shares are in issue at the date of this distribution declaration and SA Corporate’s income
tax reference number is 9179743191.
Last date to trade cum distribution Tuesday, 31 March 2020
Shares will trade ex-distribution Wednesday, 1 April 2020
Record date to participate in the distribution Friday, 3 April 2020
Payment of distribution Monday, 6 April 2020
Share certificates may not be dematerialised or rematerialised between Wednesday, 1 April and Friday, 3 April 2020, both days inclusive.
Tax implications
As SA Corporate has REIT status, shareholders are advised that the distribution meets the requirements of a "qualifying distribution"
for the purposes of section 25BB of the Income Tax Act, No. 58 of 1962 ("Income Tax Act"). The distributions on SA Corporate shares will
be deemed to be dividends, for South African tax purposes, in terms of section 25BB of the Income Tax Act. The distributions received
by or accrued to South African tax residents must be included in the gross income of such shareholders and are not exempt from income tax
(in terms of the exclusion to the general dividend exemption, contained in paragraph (aa) of section 10(1)(k)(i) of the Income Tax Act)
because they are dividends distributed by a REIT, with the effect that the distribution is taxable in the hands of the shareholder.
These distributions are, however, exempt from dividend withholding tax in the hands of South African tax resident shareholders, provided
that the South African resident shareholders have provided the following forms to their CSDP or broker, as the case may be, in respect
of uncertificated shares, or the transfer secretaries, in respect of certificated shares:
(a) a declaration that the distribution is exempt from dividends tax; and
(b) a written undertaking to inform the CSDP, broker or the transfer secretaries, as the case may be, should the circumstances affecting
the exemption change or the beneficial owner ceases to be the beneficial owner, both in the form prescribed by the Commissioner
for the South African Revenue Service. SA Corporate shareholders are advised to contact the CSDP, broker or transfer secretaries,
as the case may be, to arrange for the abovementioned documents to be submitted prior to payment of the distribution, if such documents
have not already been submitted.
Notice to non-resident shareholders
Distributions received by non-resident shareholders will not be taxable as income and instead will be treated as ordinary dividends which
are exempt from income tax in terms of the general dividend exemption in section 10(1)(k)(i) of the Income Tax Act. It should be noted
that until 31 December 2013 distributions received by non-residents from a REIT were not subject to dividend withholding tax.
From 22 February 2017, any distribution received by a non-resident from a REIT is 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 residence of the shareholder.
Assuming dividend withholding tax will be withheld at a rate of 20%, the net dividend amount due to non-resident shareholders
is 14.128 cents per SA Corporate share. A reduced dividend withholding rate, in terms of the applicable DTA, may only be relied
on if the non-resident shareholder has provided the following forms to the CSDP or broker, as the case may be, in respect
of uncertificated shares, or the transfer secretaries, in respect of certificated shares:
(a) a declaration that the dividend is subject to a reduced rate as a result of the application of a DTA; and
(b) a written undertaking to inform the CSDP, broker or the transfer secretaries, as the case may be, should the circumstances affecting
the reduced rate change or the beneficial owner ceases to be the beneficial owner, both in the form prescribed by the Commissioner
for the South African Revenue Service. Non-resident shareholders are advised to contact the CSDP, broker or the transfer secretaries,
as the case may be, to arrange for the abovementioned documents to be submitted prior to payment of the distribution if such documents
have not already been submitted, if applicable.
Reportable irregularity
During the year, the Group’s auditors, Deloitte & Touche, reported a reportable irregularity ("RI") to the Independent Regulatory Board
for Auditors ("IRBA") in relation to a director’s dealings in the Company’s shares. SA Corporate has responded to this RI and the auditors
have informed the IRBA that the RI did occur, but is no longer continuing.
The RI does not affect the fair presentation of the financial statements.
Short-form notice
The contents of this short-form announcement are the responsibility of the Board of Directors of the Company. Deloitte & Touche have issued
a modified auditor's report on the annual financial statements for the year ended 31 December 2019 as it pertains to the reportable
irregularity described above.
Shareholders are advised that this short-form announcement represents a brief summary of the information contained in the full
announcement, which, along with the key audit matters detailed in the auditor’s opinion in the annual financial statements, are published
on https://senspdf.jse.co.za/documents/2020/jse/isse/SACE/ye2019.pdf and on SA Corporate’s website www.sacorporatefund.co.za.
Any investment decisions by investors and/or shareholders should be based on a consideration of the full announcement as a whole
and shareholders are encouraged to review the full announcement as directed above. Investors and/or shareholders may request copies
of the full announcement by contacting the registered office, details of whom are set out below. The announcement is available
for inspection at the registered office of the Company at no charge during business hours.
For a more comprehensive analysis of SA Corporate’s results and outlook, please refer to www.sacorporatefund.co.za
Cape Town
10 March 2020
Sponsor: Nedbank Corporate and Investment Banking
DIRECTORATE AND STATUTORY INFORMATION
Registered office
South Wing, First Floor
Block A
The Forum
North Bank Lane
Century City
7441
Tel 021 529 8410
Registered auditors
Deloitte & Touche
1st Floor
The Square
Cape Quarter
27 Somerset Road
Cape Town
8005
Transfer secretaries
Computershare Investor Services (Pty) Ltd
Rosebank Towers
15 Biermann Avenue
Rosebank
2196
Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
135 Rivonia Road
Sandton
2196
Directors
MA Moloto (Chairman)
OR Mosetlhi (Lead Independent Director)
TR Mackey (Chief Executive Officer)*
AM Basson (Chief Financial Officer)*
RJ Biesman-Simons
N Ford-Hoon (Fok)
EM Hendricks
GJ Heron
ES Seedat
A van Heerden
* Executive
www.sacorporatefund.co.za
11 March 2020
Date: 11-03-2020 08:20:00
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