Fairvest distribution beats guidance forecast

Johannesburg, 8 September 2014, BizNews.

JSE-listed Fairvest Property Holdings today announced a second-half distribution of 6.97 cents per linked unit – taking the total for the year ended 30 June 2014 to a guidance-beating 13.72 cents (2013: 13.70 cents).

Forecast distribution growth for 2015 is between 9% and 10% – marginally up on the year just ended but still ahead of the 7% to 8% expected from the listed property sector as a whole.

The higher 2013/4 distribution comes on the back of a 175% increase in revenue to R149-million, as a result of income growth in the historic portfolio, and the acquisition from Vukile Property Fund of a portfolio of 4 retail properties.

The net profit from property operations increased by 164% to just under R100-million.

The total property portfolio rose year-on-year from R774.8 million to R1 109.1 million (mainly as a result of the Vukile acquisitions). In 2010, the portfolio was valued at R88.8-million.

Fairvest is a property investment holding company and Real Estate Investment Trust (REIT) with a unique focus on retail assets weighted toward non-metropolitan and rural shopping centres, as well as convenience and community shopping centres servicing the lower LSM market in high-growth nodes that are close to commuter networks.

The company's portfolio now consists of 32 properties, with 125 520m2 of lettable area.

Gross rentals across the Fairvest portfolio trended upwards during the year, with a 6.2% increase in the weighted average rental of R86.4/m2 at 30 June 2014 compared with the previous year.

At year-end, the weighted average contractual escalation for the portfolio was 7.2% – mainly as a result of a high national tenant percentage component of 78.6% of theportfolio…which provides unit holders with a relatively low risk investment profile, says the company.

Vacancies were down from 9% to 7% year-on-year.