Investec Property Fund (IPF), which owns a diversified portfolio of assets in SA and logistics assets in Europe has released a stellar set of results, with its distribution growing 10.8% in the year to end-March 2022 compared with the year to end-March 2021.
Joint CEO Darryl Mayers said while its European assets continued to impress, sustaining a strong performance which has lasted for a few years, the group’s domestic assets had surprised on the upside in the reporting period. Half of the firm’s 77 new leases signed with clients in the period were in SA’s retail and office sectors.
Mayers said that while many businesses had battled since the Covid-19 pandemic broke in 2020, in recent months there had been improved business activity. This had come after a number of disposals as IPF had firmed up its local portfolio. Its earnings jumped 11% with its vacancies more than halving. Meanwhile income earned from its properties climbed 34% to R1.1bn.
IPF expected its net operating income to climb 5% in the coming year. These strong results enabled IPF to declare a distribution per share of 102.23c, an impressive 10.8% higher than the comparative 2021 period; with a pay-out worth R823m.
IPF also maintained its pay-out ratio of 95%. As a real estate investment trust (Reit), IPF is required to pay out a minimum of 7% of its distributable earnings as a dividend each financial year. The company’s vacancy rate of its industrial portfolio was especially impressive, falling to 1.6% at the end of March from 17.2% at the same time last year.
IPF ended the year with assets worth R22.1bn spread across SA and Europe and a market capitalisation of R9.9bn. Its 86 properties in SA account for two-thirds of its portfolio, 41% in retail by value, 37% in office and 22% in industrial properties. Its loan-to-value (LTV) ratio, a measure of the health of its balance sheet, improved to 38.2% from 40.5%. IPF is targeting an LTV between 30% and 35%, as fund managers and other investors tend to prefer for LTVs to sit within this range or even lower.
Mayers said IPF had set R1bn in non-core properties for disposal, having already inked R530m worth of deals.
Alistair Anderson