Newpark on track with distribution growth


Newpark on track with distribution growth

Published Date: 2019-10-10 | Source: Stephen Gunnion | Author: Stephen Gunnion

Newpark on track with distribution growth

The real estate investment trust has been filling vacancies at its 24 Central property in Sandton.

Newpark Real Estate Investment Trust (REIT) is on track to grow distributable income this year as it fills empty space at its 24 Central mixed-use complex in Sandton.

Newpark says it should deliver growth of 6% to 8% for the 12 months to end-February - if there's no further deterioration in the economy and no major tenant defaults occur. Last year, it reported a rise in vacancies to 17.4% from 11.2% after a large tenant decided to consolidate its office footprint, putting pressure on revenue and distributable earnings. Since then, a focus on filling the vacancies has started to yield results, with vacancies reducing by 5.1% and rental income expected to increase in the second half of the year at market-related rates.

Apart from 24 Central, the REIT owns the adjacent JSE building in Sandton, as well as properties in Linbro Business Park and Crown Mines. Its portfolio was worth R1.41 billion after the last valuation at the end of February.

It reported an 8.9% decline in gross revenue to R61 million for the six months to end-August and net profit fell 55% to R18.5 million. Headline earnings per share were down by the same margin at 18.48c and it trimmed its interim dividend by 2.5% to 24.32c per share.

It said that a number of deals aimed at growing its portfolio referred to in its previous results announcement hadn't materialised. It also announced the appointment of former Redefine Properties executive chairman Marc Wainer to its board as a non-executive director. Wainer has over 40 years' experience in the real estate sector.

Its shares didn't trade yesterday, closing unchanged at R5.

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