This is an increase of 3.5% on the previous year and results in PI holders receiving a total return of 26.2%‚ comprising a capital return of 17.3% and income return of 8.9%.
"Contractual escalations on the bulk of the portfolio‚ significant reduction in vacancies during the period and stringent cost control‚ which includes savings from the property management tender‚ have resulted in the Fund achieving an increase in distributable income during the period.
"Excluding the adjustments in respect of future rental escalations‚ revenue rose by 7.5% over the previous period. This was positively affected by the leasing of vacant space‚ acquisitions and redevelopments in excess of R700m‚ organic growth from the existing portfolio and increased recoveries of municipal expenses‚ offset by disposals‚" the Fund said.
Property expenses increased by 6‚4% over last year‚ being successfully contained below revenue growth. Excluding the significant increase in municipal costs and leasing expenses‚ the balance of property expenses actually reduced‚ assisted by the re-negotiation of the property management contract.
Income from the Fund's listed investment in Australia increased by 8.4% because of an increase in the distribution per unit received from GOZ. It was assisted by the depreciation of the rand against the Australian dollar‚ as well as increased units being held as a result of the re-investment of the December 2012 distribution.
Net finance costs rose by 28.5% to R236.9m as a result of the incremental drawdown of R247.8m of the Fund's available debt. This is to be used for the significant capital expenditure and redevelopments. The average interest rate payable declined from 9.3% to 8.7% following the debt facility and interest-rate swap restructuring‚ as well as the decline in lending rates.
Net asset value increased by 14.9% from 1‚153 cents per PI to 1‚325 cents per PI following the revaluation of investment properties‚ the reversal of the provision for deferred capital gains tax‚ of R200.7m as a result of Emira becoming a REIT with effect from July this year‚ the unrealised gain on the revaluation of the investment in GOZ and the unrealised surplus on the revaluation of interest rate swap contracts.
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