June 4 2024 09:45
Collins Property Group, a listed landlord has reported that it has converted to a real estate investment trust (Reit) following the release of financial results for the year to end-February 2024. The company said it doubled its profit from continuing operations from R516.9m in 2023 to R1.121bn.
Collins declared a final dividend of 50c per ordinary share, bringing the total distribution for the year to 90c per ordinary share, an increase of 50% over 2023’s 60c.
Collins was formed following the extensive restructuring of what was previously Tradehold Limited, and is in its present form one of two industrial Reits listed on the JSE. The restructuring and subsequent conversion has resulted in a greatly simplified group structure with a strategic focus on growing sustainable and predictable distributable income, the group said.
Collins’ CEO, Friedrich Esterhuyse said that although finance costs increased by R70m as a result of higher interest rates, revenue increased 6.3% to R1 231m in a demanding business environment, compared favourably to CPI which sat around 5.2% in May. Tax accruals on future capital gains of R677m were written back.
Esterhuyse said that Collins’s South African property portfolio of some 1.4-mliion square metres was largely defensive. As much as 81% of it included large warehouses and distribution centres leased to national clients on a long-term basis.
“Due to this client base, which represents 86% of total rental income, we were able to collect 98.3% of all income due. The vacancy rate of 3.9% is well below the industry average, while the weighted average lease expiry date remained above four years,” said Esterhuyse.
Collins also invests in convenience retail properties, which make up 13% of its South African portfolio. New developments during the year were mainly in this sector and coincided with management’s decision to prioritise growth in the Western Cape.
Collins Group is also growing its offshore portfolio. During the reporting, Collins, as a member of a consortium, acquired four properties in the Netherlands at an average yield of 8.9%.
“The six properties we own in Austria also continued to provide a secure income,” Esterhuyse said.
Esterhuyse said a senior member of staff had been relocated to The Netherlands during the year to grow the group’s portfolio in Europe.
“To fund this growth, we are continuing to sell non-core assets. Of these eight were sold during the year while another eight are in various stages of transfer to their new owners,” he said.
alistair@propertyflash.co.za
