Property loan stock company, Redefine Income Fund, recorded a second quarter distribution of 8,5c per linked unit, which equalled that of the first quarter and raised the total interim distribution to 17c per linked unit.
Redefine anticipates that it will be able to maintain total distributions at similar levels to the payouts made in the August 31 2002 financial year, provided the property sector does not deteriorate and anticipated distributions from the listed security portfolio materialise.
One of the most important outcomes in the review period was the successful private placing of 55-millon linked units to raise R137-million - applied to reduce gearing from 60% to 55%.
Another positive feature was the success of interest-rate management, with interest-rate hedging implemented to closely cover interest-bearing liabilities. A combination of five- and seven-year rate swaps was put in place during the review period.
Redefine also increased asset base to R2,5-billion. Redefine's market capitalisation has grown above the R1-billion benchmark level that will enhance the liquidity of the company's linked units.
It states that rapid growth in Redefine's asset base and the application of accounting standards have "distorted" some comparative performance measurements.
Headline earnings of 17,02c per linked unit were marginally lower compared with the posting a year previously of 18,22 cents.
"This was due to strategic adjustments made by Redefine to its listed securities investment portfolio during the reporting period," it said in a statement.
The recent acquisition of the Rand Leases property portfolio of 27 quality properties has increased the size of the portfolio to 98 properties, 73% of which are A-grade and 27 B-grade quality. Of revenue, 62% is derived from commercial, 23% from retail, and 15% from industrial holdings.
"Vacancies at the end of the review period had been reduced to 6,2% from 6,9% at year-end August 31 2002. In 2003, 15% of leases were due to expire and a strong client retention and new business programme was working to reduce this", the company said.
By contrast, 42% of gross revenue was contracted for the next five years.
Similarly, the listed securities portfolio was lifted in value by R207-million through net acquisitions of R86-millon and increases in market value of R121-million.
Redefine is currently managed by asset managers Corpcapital following the resignation of chief executive Peter Penhall, who has taken up an overseas posting. - The Star