Rebosis jumps despite declining dividend

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Rebosis jumps despite declining dividend

Published Date: 2019-05-13 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

Rebosis jumps despite declining dividend

The real statement investment trust says the full-year dividend for its B shares will be as much as 76% lower than last year.

Shares in Rebosis Property Fund jumped as much as 9.8% on Friday ahead of a warning that its distributable income for the year to end-August would be sharply lower. Holders of its B shares can expect a significantly lower dividend for the year.

In an updated trading statement, the real estate investment trust (REIT) said distributable income was likely to be between 52% and 62% lower than last year. While holders of its A shares will continue to attract a guaranteed distribution growth of 5%, it said the dividend per share for its B units would be 74% to 76% down.

It attributed the expected decline to an increase in the cost of debt due to a higher loan to value level for the fund. It also cancelled cross currency derivatives due to the reduced value of its investment in UK shopping centre owner New Frontier Properties. Finally, rent reversion had resulted in net property income growing by less than the 4% to 5% it had expected.

As a result, it's decided not to pay an interim dividend and will distribute a full-year dividend at the end of its financial year.

Earlier in the week, the fund said it had renewed eight leases with the Department of Public Works, covering a total gross lettable area of 55,562 square metres at R110.25m2 and at an average annual contractual escalation rate of 6%. Most of the leases were extended for five years, providing security of income for an extended period.

Its B shares closed 5.3% higher at R1.40 on Friday while its A shares declined 0.3% to R19.25. The trading statement was released after the close of trade.





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