Premium Properties on property growth path - CNBC Africa

Premium Properties on property growth path


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Centre Walk Mall is one of Premium Properties' investment properties. PHOTO: City Property

Revenue increased from 585.9 million rand for the period ended 28 February 2013 to 658 million rand for the period under review.

Operating profit also saw a slight increase from 303.7 million rand in the previous comparative period to 338.4 million rand.

“Premium has delivered a total distribution for the year ended 28 February 2014 of 150.7 cents per linked unit [from 126.2 cents in 2013], representing growth in distributions to linked unit holders of 19.4 per cent,” the company said in a statement.

“The interim distribution was 66.2 cents per linked unit [from 60 in 2013], with a final distribution of 84.5 cents per linked unit [from 66.2 cents in 2013].”

[DATA PMM:Premium Properties] is a Real Estate Investment Trust listed in the 'Diversified REITS' subsector of the Johannesburg Stock Exchange. The trust also holds a large residential portfolio and also invests in the retail, industrial and office property sectors.

Profit from operations however decreased from 512.2 million rand to 466.9 million rand in the period under review. Profit before taxation increased significantly from 236.6 million rand from 170.6 million rand in the period under review.

Rental income increased by 13.1 per cent from 10.7 per cent in the previous comparative period, and net rental income also increased 13.7 per cent from 8.3 per cent.

“The residential portfolio, comprising 28.8 per cent of the total property portfolio by rental income, achieved strong growth in rental income. This was underpinned by low vacancies and strong demand for affordable and secure quality accommodation,” Premium explained.

Premium also completed three major projects during the year, which include the upgrade of Prinsman Place residential property in the Pretoria CBD, at a total cost of the 8 million rand.

The company also redeveloped the Demar Flats in the Pretoria CBD at a cost of 7.3 million rand. A fourth major project is underway.

Premium’s retail segment showed the largest growth in rental income from within the company’s segments, at 202.1 million rand from 171.9 million rand in the previous comparative year.

Rental income for the offices segment also increased from 113.5 million rand to 126.4 million rand for the period under review. Rental income for the residential segment also grew from 132.3 million rand to 148.4 million rand.

“Premium is considering a number of larger redevelopment opportunities for certain existing properties which will enhance the quality of the property portfolio and result in sustainable growing distributions in the future,” the company said.

“It is anticipated that growth in the local economy will remain subdued in the short term. Notwithstanding this environment, and barring unforeseen events, Premium anticipates that the percentage growth rate in distributions per linked unit for the next six-month period should be in line with the sector average  growth rate.”