Investec Property Fund goes ahead with dividend


Investec Property Fund goes ahead with dividend

Published Date: 2020-09-25 | Source: Stephen Gunnion | Author: Stephen Gunnion

Investec Property Fund goes ahead with dividend

The fund is in a stronger position after selling Belgian properties and an interest in its Pan-European logistics portfolio.

Investec Property Fund (IPF) is going ahead with its final dividend for its 2020 financial year after making progress with paying down debt. The decision was also informed by the Financial Sector Conduct Authority's decision not to grant real estate investment trusts any further leeway on their distributions.

Under the JSE's listing requirements, REITs must pay out at least 75% of distributable profits within four months of their financial year end to shareholders in order to retain their REIT status. While the FSCA, which is their regulator, granted them a two month extension due to the impact of Covid-19, the JSE said earlier this week that it wasn't in a position to consent to any further dispensation.

In July, IPF deferred a decision on its final dividend for the year to end-March as it continued to assess the economic impact of the pandemic. However, it said on Wednesday that after selling logistics properties in Belgium and a 10% interest in its Pan-European logistics (PEL) platform it was in a stronger position.

It acquired the two Belgian logistics properties as part of its PEL real estate strategy last year, with the intention of transferring them into the PEL platform upon refinancing of the debt within the platform. It reached a deal to transfer them last week at the Fund's acquisition cost of €70.7 million. A the same time, its reducing its stake in the platform to 65% from 75%.

IPF said it had applied the requisite solvency and liquidity testing and was confident it had enough cash to get through the uncertainty caused by Covid-19 and any further fallout. It has declared a final dividend of R314 million for the six months to end-March, which works out at 39.05c per share from its income reserves.

The fund said it would continue to monitor the operating environment both locally and abroad and upon conclusion of a successful refinancing of the PEL debt and ability to refinance bonds maturing in December, it would consider declaring a further top-up dividend.

Its shares rose 3.8% to R9.14 on Wednesday.

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