Business Report Companies

Rental income helps build up Arrowhead’s annual revenue

Manyane Manyane|Published

File picture: James White File picture: James White

Johannesburg - Listed property fund Arrowhead said yesterday that its annual revenue increased 25.8 percent, boosted by rental income and expenditure recoverable from tenants.

For the year ended September, revenue soared R1.531 billion compared with R1.217bn due to acquisitions and annual escalations to existing leases during the financial year.

Mark Kaplan, the chief executive of Arrowhead Property, said yesterday that the company’s strategy of acquiring properties had stood it in good stead.

Portfolio

“We have aggressively grown our portfolio over the past five years and successfully increased the quality of our portfolio. We remain focused on paying growing income distributions to our investors on a quarterly basis,” he said.

Kaplan said profit from operations surged to R1.172bn compared with R1.454bn for the corresponding period.

It increased its dividend for the period by 9.85 percent to 82.55 cents a share.

Kaplan said Arrowhead had an investment portfolio of R11.5bn, of which R10bn was allocated to all provinces in South Africa. While R1.5bn settled for real estate investment trusts investments.

The firm had acquired Cleary Park from Redefine Properties for R466m, Indluplace for R500m and a 10.5 percent stake in the listed Rebosis fund for R591m.

Arrowhead said it had sold four properties at a value of R126.4m during the year, which reduced buildings to 154, of which 47 percent were retails, 41 percent were offices and 12 percent were industrials.

Escalations

Last month the company announced it had sold its subsidiary, Cumulative Properties, to Gemgrow for R1.89bn.

Imraan Suleman, the chief financial officer of Arrowhead, said: “Despite the tough macroeconomic environment, we continued to achieve average rental escalations of 8.11 percent on lease renewals across the country property portfolio.

“Our balance sheet is well positioned to weather the challenging environment,” he said.

Shares rose 1.85 percent yesterday to close at R8.80.

BUSINESS REPORT