Resilient’s dividends have climbed after getting through the pandemic. The real estate investment trust (Reit) saw its dividend climb 3% in the six months to end June as the mall owner finally recovered from the pandemic. The company which owns malls which dominate their catchment areas especially in small towns, has also climbed out of the property scandal which saw its investors lose tremendous amounts of money in 2018.
The group reported on Friday that it declared a dividend of 234,05 cents per share for the six months ended June 2022. This represented an increase of 3,5% compared with the dividend of 226,11 cents per share for the six months to end June 2021. Resilient also distributed 170 554 201 Lighthouse shares to its shareholders in May 2022. As such, no dividends from these shares were included in distributable earnings for this interim period.
Had Resilient retained these shares, the interim dividend would have been 10,2% higher than the comparable dividend, CEO Des De Beer said. Resilient even managed to hold onto its cinema tenants.
“The COVID-19 pandemic no longer has a significant impact on the group’s shopping centres and no further discounts were provided to leisure-focused tenants. New rental agreements, base rental plus a turnover clause have been agreed with Ster-Kinekor. A similar arrangement has been proposed to NuMetro ” the group said.
Resilient’s portfolio achieved strong comparable sales growth of +9,9% for the six months to end June 2022 compared with the six months to end June 2021. The South African property portfolio recorded comparable net property income growth of 7,7% for the reporting period, excluding COVID-19 rental discounts granted in the comparable period.
Resilient also said, via Sens, that it would consider delisting from the JSE as the bourse was no longer the best place to raise capital.
“With its advisers, Resilient is evaluating its listing on the JSE and all alternatives with the objective of maintaining high standards of governance and reporting, but with greater efficiency and focus on investor interests, with a view to reducing volatility for investors,” it wrote.
Between 2010 and 2017, listed property funds’ main goal was to grow dividends as they were seen as reliable income payers for the pension funds which invested in them. Fund managers threw capital at them. As real estate investment trusts (Reits) these property funds would pay out all of their distributable income which was taxed in the hands of the shareholders.
But in recent years, property funds have begun to focus on achieving sustainable net asset value growth.
Should Resilient which has market capitalisation of R22bn delist, it may be followed by numerous other funds seeking liquidity.
But Evan Robins, an analyst and senior fund manager at Old Mutual Investment Group of SA said he couldn’t see many property funds delisting for the reasons Resilient had proposed.
“I doubt it. No other funds have ever flagged this as an issue to my knowledge and capital has been raised for offshore investments. If the JSE in time loses its dominance as the exchange that would be different. This does not mean there will not be companies leaving the JSE because they have been taken private,” he said.