SA Corporate Real Estate revalues portfolio


SA Corporate Real Estate revalues portfolio


Published Date: 2021-03-30 | Source: Stephen Gunnion | Author: Stephen Gunnion

SA Corporate Real Estate revalues portfolio

The real estate investment trust says divestments over the past year have placed it in a position to make a distribution.

SA Corporate Real Estate has cut the value of its local property portfolio due to worsening market conditions as a result of Covid-19. It has also reduced its dividend payout ratio following a tough year.

The real estate investment trust (REIT) owns a diversified portfolio of industrial, retail, commercial and residential buildings located primarily in the major metropolitan areas of SA with a secondary node in Zambia. The property portfolio consists of 188 properties, with just over 1 million square metres of lettable area, which it valued at R16-billion at the end of December, down 8% a year earlier. Its 50% joint venture in three Zambian properties is valued at R880-million. It also holds an 80% joint venture in The Falls Lifestyle Estate valued at R142-million and listed investments valued at R113-million.

Apart from a deterioration in trading conditions, which affected its retail portfolio, it said the valuation of its industrial portfolio was impacted by negative rental reversions, while the decrease in commercial office valuations was indicative of the challenges faced by the sector.

Revenue for the year to end-December declined by 9.7% to R2.06-billion, while total net property income fell 21% to R1.1-billion. Distributable income decreased by 37% to R601-million. It reported a loss per share of 59.39c, down from earnings of 9.32c in 2019, primarily due to the lower property valuations. Headline earnings per share fell 82% to 6.34c and it lowered its annual distribution by 53% to 17.93c per share, based on a payout ratio of 75% of distributable income. The previous year's dividend of 38.04c was based on a 100% payout ratio. Its net asset value per share amounted to 401c at the end of December, down 16% from a year earlier.

Since January 2020, the company said it had divested of property totalling R1.59-billion, with some of the proceeds aimed at settling debt. It said the divestments also supported its ability to pay a dividend for the year.

The company's shares closed 4.2% higher at R1.98 yesterday.


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