Resilient Fairvest sticks to distribution


Resilient Fairvest sticks to distribution

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

Resilient Fairvest sticks to distribution

The shopping centre owner says its focus on lower-LSM markets in non-metropolitan areas shielded it from the worst of the lockdown.

Fairvest says its strategy of mainly investing in grocery anchored shopping centres in non-metropolitan areas servicing lower-LSM markets helped shield it from the impact of Covid-19 on other property groups. Throughout the pandemic, it says these assets proved more resilient, without significant increases in vacancies. As a result, its paying a total dividend for the year that's only slightly down from last year.

The real estate investment trust (REIT) said the value of its portfolio of 34 properties increased by 1% to R3.49 billion on a like-for-like basis over the year to end-June. Revenue rose 8.7% to R532 million and like-for-like net property income grew by 0.8% as it contained vacancies at 4.5% of total lettable area. Tenant retention remained high at just over 73% while arrears were low at 4.4% of revenue.

Headline earnings per share fell 49% to 10.94c and it's declared a dividend of 9.883c for the second six months, taking its total distribution for the year to 21.038c per share, down 3.4% from last year.

Fairvest said its focus for the year ahead would be on maintaining viable tenancies and letting of vacancies, with a strong focus on the collection of arrears which accumulated over the last three months of its financial year. Its balance sheet remained conservative with R133 million of undrawn debt facilities which would allow it to consider opportunistic yield accretive acquisitions.

Fairvest's shares rose 10% to R1.65 on Wednesday.

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