Investec Property Fund strengthens offshore focus


Investec Property Fund strengthens offshore focus


Published Date: 2019-05-15 | Source: Stephen Gunnion | Author: Stephen Gunnion

Investec Property Fund strengthens offshore focus

The real estate investment trust's 2019 distribution was supported by its investment in its Pan-European logistics platform.

Investec Property Fund's increased offshore exposure has helped support growth in its full-year distribution as the macro environment in SA remains challenging. But the fund says recent rental concessions agreed with ailing retail group Edcon will hinder next year's payout.

Reporting results for the year to end-March, the real estate investment trust (REIT) said its offshore exposure increased to 15.2% of its portfolio last year as it deployed a further €88.4 million into its Pan-European logistics investment. The platform delivered a total return of 26% in euro, driven by strong leasing activity and a well-positioned asset base. It's now committed €64.5 million to a new Pan-European light industrial platform, which it says will complement its logistics strategy and provide further earnings-accretive offshore exposure. Earlier this month it announced plans to potentially reduce its stake in Investec Australia Property Fund when it lists on the Australian Securities Exchange so it can further diversify its portfolio.

Back home, like-for-like net property income growth of 0.8% over the year was reflective of local market conditions. It said there was limited local acquisition activity during the year, as it focused on extracting more value from its existing SA portfolio and deploying capital into the European assets.

Total revenue rose 1% to R1.84 billion, including a straight line rental revenue adjustment of R31.9 million. Operating profit declined 5.3% to R1.41 billion but attributable income rose 14% to R1.43 billion due to higher finance income. It's announced a final dividend of 73.51c per share, taking its total dividend for the year to 142.32c.

It said the agreement with Edcon would impact the current year's dividend growth by 1%.

Its shares declined 1.8% to R15.59 yesterday.


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