Investec Property Fund weathers Covid-19

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Investec Property Fund weathers Covid-19

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Published Date: 2021-05-20 | Source: Stephen Gunnion | Author: Stephen Gunnion

Investec Property Fund weathers Covid-19

The fund has continued paying out dividends throughout the pandemic and says gearing levels leave it well positioned.

Investec Property Fund (IPF) says its annual results reflect the impact of Covid-19, which brought with it unprecedented socioeconomic and market conditions, economic weakness and uncertainty in the business environment - as well as a sharp decline in distributable earnings. However, manageable debt levels allowed it to continue paying out dividends throughout the pandemic, while leaving it well positioned for future growth.

Despite facing Covid-19-related challenges in the first half of its financial year, IPF said its operational and cashflow performance metrics showed signs of stabilisation the second half, enabling it to deliver a respectable set of results overall.

It said the 2021 numbers reflected a divergent set of results, with the SA portfolio weathering a greater Covid impact. Europe, however, saw further tailwinds with logistics demand and structural changes accelerating through the pandemic, underpinning the Fund's stability through the downturn.

In response to the pandemic, IPF committed to R62-million of rental relief to local tenants, while achieving a 96% cash collection rate in SA. The European portfolio continued to perform well, benefitting from the acceleration of growth drivers in the sector as a result of global lockdowns, with strong rent collection rates of 99%, low tenant defaults and high occupancy rates maintained through the period.

Following a restructuring of its portfolio, the IPF balance sheet now comprises 44% of offshore investments, namely the strategic interest in the PEL portfolio, giving it exposure to the European logistics market. The diversified SA asset base makes up the remaining 56%. It said this sectoral and geographical focus had allowed it to deliver returns throughout the cycles despite negative reversions in the domestic market.

Distributable earnings for the year declined by a third to 97.08c per share. It declared a final dividend of 47.71c, taking the total dividend for the year to 92.23c per share. It ended the year with gearing of 38.3% after disposing of assets worth R5.8-billion.

The fund's shares fell 2.1% to R10.54 yesterday.





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