Texton continues with disposals


Texton continues with disposals

Published Date: 2020-05-20 | Source: Stephen Gunnion | Author: Stephen Gunnion

Texton continues with disposals

The property fund is selling non-core assets as it focuses on strengthening its balance sheet and reducing debt.

Texton Property Fund has continued rationalising its portfolio as it sells non-core assets to reduce its debt. It has sold its Rynlal office property in Lynwood in the Tshwane municipality to Citosolve Investments for R29 million. It will get a R4 million top up when Citosolve strikes a lease agreement on an adjacent site to the property for a parking lot.

The real estate investment trust (REIT) says the disposal of Rynlal, which comprises 2.06% of its gross leasable area, is consistent with its strategy of owning quality, income producing properties while reducing its exposure to the office sector.

Texton, which owns commercial, industrial and retail properties in SA and the UK, said it was focused on strengthening its balance sheet. Its total loan to value ratio was 44.9% at the end of December and it's has since paid R70 million into its banking facilities. It also closed out a cross currency interest rate derivative last month, which reduced its currency risks.

In the six months to end-December, the value of Texton's portfolio declined by 3.7% to R4.24 billion after it sold its Tesco Chobe centre in Newcastle in the UK for R201 million. It used the proceeds from the sale to pay down UK debt.

The REIT said 29% of its tenants were classified as providing essential services and had remained fully operational during the lockdown in both geographies. It collected 80% of its total April billings in SA and, to date, 69% of May billings. In the UK, it collected 87% of rent for the second quarter ending June, with 97% in April and 96% in May.

Its shares rose 1.1% to 90c yesterday. The sale agreement was announced after the close of trade.

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