“We are excited to have exceeded our growth objectives in challenging circumstances. We grew the portfolio by 2.3 billion rand without raising equity due to strategic head room created in the prior year that resulted in low gearing,” said Sisa Ngebulana, chief executive of Rebosis.
“The team did a really good job in improving portfolio fundamentals, decreasing the overall cost of funding and driving continued operating efficiencies across our portfolio.”
(READ MORE: Rebosis Fund posts positive H1 results)
The property portfolio increase relates mainly to the acquisition of Nthwese portfolio for 1.06 billion rand as well as Ascension Manco and units earlier in the year.
“The strategic acquisition of the Ascension linked units as well as the Ascension Manco, diversifies the overall investment basket within Rebosis. Although our focus will predominantly remain on growing a quality retail portfolio, we will acquire assets if and when it makes sense in terms of the investment criteria set by the Board,” he added.
“Since the takeover of the Ascension Manco we have successfully managed the assets and reduced vacancies significantly. The possible Ascension scheme of arrangement will further secure size and liquidity, but we will not rush this transaction.”
(WATCH VIDEO: Rebosis absorbs Delta's stake in Ascension)
Rebosis’ current portfolio of 19 properties has a total gross leasable area (GLA) of 414,398 square meters across Gauteng, Eastern Cape, KwaZulu Natal and North West Province. The portfolio comprises of 44 per cent retail, 54 per cent office and two per cent industrial in value.
Its retail portfolio consists of four large shopping malls underpinned by strong anchor and national tenants that deliver income streams at an average of 7.5 per cent. Hemingways Mall in the Eastern Cape is Rebosis’ largest property in its portfolio which has reported turnover growth of 8.8 per cent.
The office portfolio consists of 14 buildings, mostly leased to government tenants under long term agreements, contributes a significant portion to earnings and shields Rebosis from private sector risks such as tenant insolvency and default.
“Our government exposure is well managed with mainly single tenanted, long-term leases in place. There is some confusion around National Treasury’s directive, but we continue to negotiate new leases at an average 7 per cent escalation over five years due to our empowerment status,” explained Ngebulana.
The group declared full-year revenue of 855.9 million rand with basic and diluted headline earnings per linked unit at 100.40 cents.
An annual distribution of 99.45 cents per unit for year was posted, up 8.1 per cent on the prior year distribution of 92.2 cents per unit.
“Given our high-growth, defensive portfolio fundamentals we remain bullish on the performance of the fund. Demand for space remains strong, vacancies are low and operating costs are well managed,” said Ngebulana.