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RESILIENT REIT LIMITED - Audited financial results for the year ended 31 December 2023

Release Date: 14/03/2024 13:34
Code(s): RES RES60 RES62 RES53 RES65 RES66 RES52 RES63 RES61 RES59     PDF:  
Wrap Text
Audited financial results for the year ended 31 December 2023

Resilient REIT Limited
Incorporated in the Republic of South Africa
Registration number: 2002/016851/06
JSE share code: RES 
ISIN: ZAE000209557
Bond company code: BIRPIF
LEI: 378900F37FF47D486C58 
(Approved as a REIT by the JSE)
("Resilient" or "the Company" or "the Group")

Audited financial results for the year ended 31 December 2023

Nature of the business
Resilient is a retail-focused Real Estate Investment Trust ("REIT") listed on 
the JSE Limited ("JSE"). Its strategy is to invest in dominant retail centres 
with a minimum of three anchor tenants and let predominantly to national 
retailers. A core competency is its strong development skills which support 
new developments and the reconfiguration of existing malls to adapt to 
structural changes in the market. Resilient also invests directly and 
indirectly in offshore property assets.

The Company's focus is on regions with strong growth fundamentals. Resilient 
generally has the dominant offering in its target markets with strong 
grocery and flagship fashion offerings.

Distributable earnings and dividend declared
The Board has declared a dividend of 203,02 cents per share for the six 
months ended December 2023. The total dividend of 406,24 cents per share 
for FY2023 is in line with the guidance of approximately 400,00 cents per 
share provided in the interim results. The results were ahead of guidance 
mainly due to less loadshedding experienced in the portfolio compared to 
what was expected, particularly in the months of November and December. 
The total dividend for FY2023 is 7,3% lower than the 438,03 cents per 
share for the previous year. The main reasons for the decline in 
distributable earnings are higher interest rates (increase of 450 basis 
points since January 2022 with long-standing interest rate caps not 
providing full protection) and lower distributions from 
investee companies.

Commentary on results
South Africa
The South African property portfolio recorded comparable net property 
income ("NOI") growth of 7,1% for the year. This growth has been supported 
by Resilient's energy strategy that assisted in containing the rise in 
electricity costs.

During FY2023, comparable sales increased by 5,2%. Comparable sales were 
impacted by the high base effect in KwaZulu-Natal, construction at Mahikeng 
Mall and surrounding infrastructure upgrades in Mahikeng as well as the 
redevelopment of Tzaneng Mall. Excluding these malls, the remaining portfolio 
achieved comparable sales growth of 6,9%. Strong trading performances were 
achieved in the Northern Cape, Mpumalanga and Limpopo provinces. During FY2023, 
trading was supported by the new Checkers at The Grove Mall as well as the 
Dis-Chem and Food Lover's Market that opened in Kathu Village Mall. Dis-Chem 
also opened in I'langa Mall, Tubatse Crossing and Diamond Pavilion. A 
relocated and enlarged Truworths store was opened in Mvusuludzo Mall. A&D 
Spitz, Kurt Geiger, G-Star RAW, Fabiani, Pringle, Skipper Bar and Le Coq 
Sportif opened in Tubatse Crossing while Totalsports, Sportscene and 
Markham expanded materially. G-Star RAW and Fabiani opened in Limpopo Mall. 
At Mall of the North, Checkers was fully revamped, while Sportscene, 
Totalsports, Baby City and Hi-Fi Corporation were materially expanded.
Checkers and Clicks are being expanded and revamped at Diamond Pavilion.
Sportscene, Totalsports and Markham were expanded and revamped at Kathu 
Village Mall. During the year, A&D Spitz, Fabiani, Polo, Yuppiechef and 
Pringle were introduced and Poetry and Sportscene were expanded at 
I'langa Mall. The new Pick n Pay store in Jabulani Mall, owned by a leading 
local franchisee, opened in November 2023.

Rentals on lease renewals were concluded on average 4,6% higher than 
expiring rentals. Leases concluded with new tenants were on average 26,5% 
higher than the rentals of the outgoing tenants. In total, rentals for 
renewals and new leases increased on average by 7,9%.

Resilient is invested in 27 retail centres with a gross lettable area of 
1,2 million square metres. Resilient's pro rata share of the vacancy in 
the portfolio was 1,5% at December 2023. This includes vacancies created 
to facilitate the introduction of new tenants at Tzaneng Mall and 
Jabulani Mall.

Resilient owns a 40% interest in Retail Property Investments SAS ("RPI"), 
the owner of four regional malls in France, in partnership with Lighthouse 
Properties p.l.c. ("Lighthouse").

In 1H2023, the French portfolio was negatively affected by a number of 
tenant failures and receiverships, including Go-Sport, La Grande Recre, 
Kookai, Don't Call Me Jennyfer and San Marina. A common theme was that 
most of these retailers had private equity capital structures. 
Administrative procedures in France are challenging, resulting in delays 
of up to 12 months to recover space from failing tenants. These tenant 
failures increased the French vacancies from 7,2% at FY2022 to 9,0% at 
1H2023. At December 2023, vacancies reduced to 7,9% following lettings 
to national retailers such as Chaussea (a leading French footwear 
retailer), Bershka, Action and Normal. Although economic conditions 
remain subdued, terms have been agreed (pending lease signature) with 
international tenants for 3 877m2 of currently vacant space. The 
conclusion of these leases will further reduce vacancies in the 
French portfolio to 5,2%.

Comparable sales for FY2023 grew by 6,5% with footfall increasing by 
9,6%. The improved footfall was driven by the introduction of new 
retailers including Action, New Yorker and Primark.

At Saint Sever, Primark successfully opened its 6 709m2 flagship 
store and is trading ahead of expectation. The Primark opening 
increased December's footfall by over 29% year-on-year. The 
introduction of Primark has resulted in a significant increase in 
tenant demand. During the year, New Yorker, ONLY and Crep'eat opened 
for trading and Bershka, Normal and Chaussea have either concluded 
leases or taken beneficial occupation to open new stores during FY2024. 
Footlocker has agreed to relocate from its current 250m2 store to a new
450m2 flagship concept on the upper level of the mall. Terms have been 
agreed with a large international sports retailer to occupy the majority 
of the space vacated by Go-Sport (which went into receivership in 
February 2023) with the remaining space having been let to Chaussea.

In 1Q2024, the expansion project at Rivetoile commenced. This project 
will improve the flow on the upper level of the mall. JD Sports is 
currently fitting out its store and will open during 2Q2024.

At Docks Vauban, Starbucks opened during August 2023. Leases have 
been concluded with Action and Pull&Bear to enter the mall. The 
extensive road infrastructure upgrade in the immediate vicinity 
of the mall was completed during November 2023, which has 
improved access and egress to the mall.

Action opened a 1 247m2 store on the first floor of Docks 76 
during December 2023. A lease has been concluded with Snipes for 
a 426m2 store which is scheduled to open during March 2024.

Resilient and Lighthouse each own a 50% interest in the holding 
company of Salera Properties, S.L.U. ("Propco"). On 21 December 2023, 
Propco entered into an agreement for the acquisition of Salera 
Centro Comercial ("Salera"), a retail shopping centre in the city 
of Castellon de la Plana, Spain. The transaction closed and Propco 
took transfer of Salera on 31 January 2024.

Salera opened in 2006 and is the dominant regional shopping centre 
in the province of Castellon. The shopping centre provides a 
comprehensive retail offering of 68 752m2, including a 13 693m2 
Alcampo Hypermarket. The Alcampo Hypermarket is under separate 
ownership and does not form part of the acquisition. Salera is 
fully let to 147 major international and national tenants including 
Primark, H&M, JD Sports, FNAC, Primor, C&A and eight Inditex brands 
(Zara, Massimo Duo, Leties, Bershka, Pull&Bear, Oysho, Zara Home 
and Stradivarius). The entertainment offering includes a 14-screen 
cinema, an arcade, bowling, as well as a food court. The current 
annual footfall is 9 million, which is 8,7% above 2019 levels. 
The shopping centre is well located with easy access to the A-7 
motorway (the main motorway between Valencia and Barcelona).

The retail landscape in Castellon de la Plana is consolidating 
into Salera and Zara closed its high-street location in the 
city in January 2024. Salera now offers the only Zara in the 

During December 2023, Resilient paid EUR8,6 million (R171,6 million) 
as a deposit towards the acquisition of Salera. The purchase 
consideration of EUR174,5 million (100% and inclusive of transaction 
costs) represents an annualised net initial yield of 7,7% based on 
the forecast 2024 net operating income. In total, Resilient paid 
EUR87,25 million (R1,765 billion) for its share of Salera. The 
intention is for Propco to introduce senior bank debt of approximately 
45% of the acquisition price in due course.

Resilient Africa, together with local partners, owns Asaba Mall, Delta 
Mall and Owerri Mall. Resilient owns 60,94% of Resilient Africa in 
partnership with Shoprite Holdings Limited ("Shoprite").

Resilient Africa received USD45 million of funding from the Shoprite 
group which was due to be repaid on 3 March 2024. The funding was 
secured by the three properties, with no recourse to Resilient's 
South African balance sheet. As the valuation of the properties 
exceeds the value of the funding, Resilient and Shoprite effectively 
agreed, subsequent to year-end, that Resilient's portion of the 
properties will settle its share of the debt. Consequently, Resilient 
will dispose of its Nigerian operations to Shoprite for a consideration 
of R1. From 3 March 2024, Resilient has no further financial 
obligations with regard to the Nigerian operations with Shoprite 
taking full responsibility thereof.

The Nigerian investment contributed 42 cents per share to Resilient's 
net asset value of R66,28 per share at December 2023.

Energy projects
Resilient has continued the roll-out of solar and battery installations 
in line with its long-term energy strategy in South Africa. Resilient 
exceeded its target by increasing its generation capacity to 59,9MWp 
by December 2023. This constitutes 27,7% of Resilient's total energy 

It is projected that installed capacity will increase by a further 
16,5MWp during FY2024. Resilient continues to reduce its energy 
demand through various initiatives, including relamping of centres 
and upgrading air-conditioning systems. Resilient actively assists 
tenants in becoming more energy efficient.

Property valuations
Resilient's full property portfolio was subject to an external 
valuation at December 2023. The South African property portfolio 
was valued by Quadrant Properties Proprietary Limited. Resilient's 
share of the positive revaluation of its South African portfolio was 
R1,2 billion (4,8%).

The French portfolio was valued by Jones Lang LaSalle and the 
Nigerian portfolio by CBRE Excellerate. Resilient's share of the 
negative revaluation of the French portfolio was EUR8,3 million 
and its share of the negative revaluation of the Nigerian portfolio 
was USD11,7 million.

Listed portfolio
Resilient's interest in Hammerson plc was sold during the year in 
line with the Board's priority to proceed with Resilient's energy 
initiatives and fund its capital commitments while retaining 
conservative leverage. Total proceeds of R1,2 billion were received 
against the original purchase price of R746,4 million. In respect of 
its Lighthouse investment, Resilient elected to receive scrip 
dividends in April 2023 and 50% of its dividend as a scrip dividend 
in October 2023. The Group currently owns 30,8% of Lighthouse.

Financial performance
                               Audited for          Audited for 
                            the year ended       the year ended
                                  Dec 2023             Dec 2022      Movement
IFRS information
Total revenue (R'000)            3 575 417            3 502 675        72 742
Basic earnings per 
share (cents)                     1 048,61             1 081,99        (33,38)
Diluted earnings per 
share (cents)                     1 046,43             1 077,92        (31,49)
Headline earnings per 
share (cents)                       395,10               536,41       (141,31)
Diluted headline earnings
per share (cents)                   394,27               534,39       (140,12)
Dividend per share (cents)          406,24               438,03        (31,79)
Net asset value per share (R)        65,71                58,26          7,45
Management account information 
Net asset value per share (R)        66,28                62,18           4,1
Loan-to-value ratio (%)               35,2                 34,7           0,5
Gross property expense ratio (%)      39,9*                38,0           1,9
Percentage of direct and indirect 
property assets offshore (%)          22,0                 23,8          (1,8)

* The cost ratio has been impacted by increased vacancy in the French portfolio 
(9,0% at 1H2023, subsequently reduced to 7,9% at December 2023) and increased 
repairs and maintenance, particularly air-conditioning and electrical components 
(2023: R78,4 million, 2022: R62,4 million). 

Macroeconomic factors such as low economic growth and the higher interest rates 
continue to impact on the Group's performance.

In a South African context, high unemployment, continued loadshedding, 
infrastructure maintenance and the delivery of municipal services remain 
concerning. Despite these factors, Resilient's South African portfolio has 
performed well. This is expected to continue in FY2024. Management's focus will 
therefore remain on ensuring the portfolio is defensive against these challenges.

Resilient will continue to maintain a conservative loan-to-value ratio and 
hedging profile. Distributions will be impacted as in-the-money interest rate 
hedges rebase. Lighthouse has guided lower dividends for FY2024 as it further 
grows its direct property portfolio. The currency hedges in respect of FY2024 
are higher than those of FY2023, neutralising the impact of the lower euro 
dividends expected.

The Board forecasts that the dividend for FY2024 will be in line with that of 
FY2023. This assumes that interest rates remain unchanged, Lighthouse achieves 
its guidance, there is no further deterioration of the macroeconomic environment, 
no major corporate failures occur and that tenants will be able to absorb the 
rising utility costs and municipal rates. The Board will maintain a payout ratio 
of 100% of distributable earnings. This forecast and prospects have not been 
audited, reviewed or reported on by Resilient's auditor. 

Payment of final dividend
The Board has approved and notice is hereby given of a final dividend of 
203,02000 cents per share for the six months ended 31 December 2023.

The dividend is payable to Resilient shareholders in accordance with the 
timetable set out below:
Last date to trade cum dividend                            Tuesday, 9 April 2024
Shares trade ex dividend                                Wednesday, 10 April 2024
Record date                                                Friday, 12 April 2024
Payment date                                               Monday, 15 April 2024

Share certificates may not be dematerialised or rematerialised between Wednesday, 
10 April 2024 and Friday, 12 April 2024, both days inclusive.

In respect of dematerialised shareholders, the dividend will be transferred to 
the Central Securities Depository Participant ("CSDP") accounts/broker accounts 
on Monday, 15 April 2024. Certificated shareholders' dividend payments will be 
posted on or about Monday, 15 April 2024.

The auditor, PricewaterhouseCoopers Inc., has issued an unmodified audit opinion 
on the FY2023 AFS. This opinion is available, along with the FY2023 AFS, at the 
registered offices of the Company and on the Company's website at The audit was conducted in accordance 
with International Standards on Auditing.

This results announcement is the responsibility of the directors and is 
only a summary of the information in the FY2023 AFS and does not 
include full or complete details. The FY2023 AFS have been released on 
SENS and are available on the JSE website at, and 
on the Company's website at 
Any investment decision by investors and/or shareholders should be based 
on the FY2023 AFS available on the Company's website.

Dividend tax treatment
In accordance with Resilient's status as a REIT, shareholders are advised 
that the dividend of 203,02000 cents per share for the six months ended 
31 December 2023 ("the dividend") meets the requirements of a "qualifying 
distribution" for the purposes of section 25BB of the Income Tax Act, 
58 of 1962 ("Income Tax Act"). The dividend will be deemed to be a dividend, 
for South African tax purposes, in terms of section 25BB of the Income 
Tax Act.

The dividend received by or accrued to South African tax residents must be 
included in the gross income of such shareholders and will not be 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 it is a dividend distributed by a REIT. This dividend is, however, 
exempt from dividend withholding tax in the hands of South African tax resident 
shareholders, provided that the South African resident shareholders provide 
the following forms to their CSDP or broker, as the case may be, in respect 
of uncertificated shares, or the Company, in respect of certificated shares:
a) a declaration that the dividend is exempt from dividends tax; and
b) a written undertaking to inform the CSDP, broker or the Company, 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. Shareholders are advised to contact their CSDP, broker or the Company, 
as the case may be, to arrange for the above-mentioned documents to be 
submitted prior to payment of the dividend, if such documents have 
not already been submitted.

Dividends received by non-resident shareholders will not be taxable as income 
and instead will be treated as an ordinary dividend which is exempt from 
income tax in terms of the general dividend exemption in section 10(1)(k)(i) 
of the Income Tax Act. Any distribution received by a non-resident 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 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 162,41600 cents per 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 
their CSDP or broker, as the case may be, in respect of uncertificated shares, 
or the Company, 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 their CSDP, broker or the Company, 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 their CSDP, broker 
or the Company, as the case may be, to arrange for the above-mentioned documents 
to be submitted prior to payment of the dividend if such documents have not 
already been submitted, if applicable. Shares in issue at the date of declaration 
of this dividend: 365 204 738.

Resilient's income tax reference number: 9579269144. 

By order of the Board

Johann Kriek                    Monica Muller                      Johannesburg
Chief executive officer         Chief financial officer           14 March 2024

Alan Olivier (chairman); Stuart Bird; Des de Beer; Des Gordon; Johann Kriek*; 
Dawn Marole; Monica Muller*; Protas Phili; Thando Sishuba; Barry Stuhler; 
Barry van Wyk (* executive director)

Changes to the Board
Des de Beer served as chief executive officer ("CEO") until December 2023 and 
his status changed to non-independent non-executive director from January 2024. 
Johann Kriek was appointed as CEO from 1 January 2024.

Company secretary and registered address 
Hluke Mthombeni CA(SA)
4th Floor, Rivonia Village, Rivonia Boulevard, Rivonia, 2191

Transfer secretaries
JSE Investor Services Proprietary Limited, 5th Floor, One Exchange Square, 
Gwen Lane, Sandown, 2196

Java Capital Trustees and Sponsors Proprietary Limited, 6th Floor, 1 Park Lane, 
Wierda Valley, Sandton, 2196

Debt sponsor
Rand Merchant Bank (a division of FirstRand Bank Limited), 1 Merchant Place, 
corner of Fredman Drive and Rivonia Road, Sandton, 2196

Date: 14-03-2024 01:34:00
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