Octodec’s property portfolio delivers strong growth


“Trading conditions and consumer confidence remained subdued during the financial period,” the South African company said.

“The property portfolio continued to deliver strong growth in earnings with rental income increasing following a number of successful upgrades of properties and a proactive approach to letting.”

(READ MORE: S.African residential property market on the rise)


Octodec further stated that rental income and net rental income for the year ended 31 August 2014 increased by 6.8 per cent and 11.1 per cent respectively compared to the prior comparative twelve-month period.

“Following the introduction of the REIT legislation, in anticipation of a merger between Premium and Octodec, and to simplify the corporate structure, Premium, Octodec, IPS Investments Proprietary Ltd and City Property entered into an agreement,” it said.

“In recent years, the profiles of Premium and Octodec’s property portfolios have become increasingly similar. The merger has created the most significant residential property portfolio of any REIT that is listed on the JSE.”

(READ MORE: Octodec and Premium’s combined portfolio valued at R10bn)

Its revenue increased to 537 million rand in the 2014 year from 506 million rand for the same period in 2013.

“The increase in revenue was mainly due to contractual escalations, improved letting and an increase in the recovery of utility and assessment rate charges. The twelve-month period saw limited improvement in the office and industrial rental markets and a slight decrease in vacancies,” Octodec said.

“One of the primary objectives continued to be the improvement of the quality of the properties in order to attract new tenants. The performance of Killarney Mall, the group’s flagship shopping centre, was extremely pleasing.”

Operating profit grew 9.2 per cent from 226 million rand in 2013 to 247 million rand in 2014 while profit before taxation increased to 378 million rand from 211 million rand.

Basic and fully diluted earnings per share increased from 354.3 cents in the 2013 year to 336.4 cents in 2014.

“A number of redevelopments of certain existing properties are under way which will enhance the quality of the property portfolio and result in sustainable growing dividends in the future,” said [DATA OCT:Octodec].

“Growth in the local economy is expected to remain subdued. Barring unforeseen events, current indications are that the increase in dividend per share for the next twelve-month period should be between 7.0 per cent and 9.0 per cent.”