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IPF
IPF
IPF - Investec Property Fund Limited - Reviewed preliminary condensed financial
results for the year ended 31 March 2012
Investec Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2008/011366/06)
Share code: IPF ISIN: ZAE000155099
(Income tax reference number 9332/719/16/1)
Reviewed preliminary condensed financial results for the year ended 31 March
2012
Statement of comprehensive income
For the year ended 31 March 2012 2012
Notes R`000
Revenue, excluding straight-line rental revenue 211 558
adjustment
Straight-line rental revenue adjustment 30 507
Revenue 242 065
Property expenses (38 498)
Net property income 203 567
Other operating expenses (11 858)
Operating profit 191 709
Fair value adjustments 1 (30 507)
Finance costs (6 034)
Finance income 3 016
Profit before debenture interest and taxation 158 184
Debenture interest 2 (158 026)
Profit before taxation 158
Taxation (49)
Normal and Secondary Taxation on Companies (49)
Deferred taxation charge (25 733)
Deferred taxation credit 25 733
Total comprehensive income attributable to equity 109
holders
Statement of financial position
As at 31 March 2012 2012
Notes R`000
ASSETS
Non-current assets 2 065 400
Fair value of investment property for accounting 2 034 893
purposes
Straight-line rental revenue adjustment 30 507
Current assets 16 634
Trade and other receivables 12 064
Taxation receivable 3
Cash and cash equivalents 4 567
Total assets 2 082 034
EQUITY AND LIABILITIES
Equity - ordinary share capital 4 1 700
Fair value of debentures 5 1 836 379
Total unitholders` interest 1 838 079
Other non-current liabilities 6 1 169
Current liabilities 242 786
Trade and other payables 28 097
Current portion of other non-current liabilities 6 130 900
Linked unitholders for interest and dividends 83 789
Total liabilities - including debentures 2 080 334
Total equity and liabilities 2 082 034
Condensed statement of cash flows
For the year ended 31 March 2012 2012
Note R`000
Cash generated from operations 7 173 486
Finance income received 3 016
Finance costs paid (2 285)
Taxation paid (52)
Distribution paid to unitholders (74 346)
Net cash inflow from operating activities 99 819
Net cash outflow from investing activities (1 926 152)
Net cash inflow from financing activities 1 830 900
Net increase in cash and cash equivalents 4 567
Cash and cash equivalents at beginning of the -
year
Cash and cash equivalents at end of the year 4 567
Condensed statement of changes in equity
For the year ended 31 March 2012 Ordinary Retained Total
share capital earnings equity
R`000 R`000 R`000
Balance at 1 April 2011 - - -
Issue of ordinary shares 1 700 - 1 700
Total comprehensive income - 109 109
Dividends payable to ordinary - (109) (109)
shareholders
Balance at 31 March 2012 1 700 - 1 700
Condensed segmental information
For the year ended 31 March Office Industrial Retail Total
2012
R`000 R`000 R`000 R`000
Statement of comprehensive
income 2012
Revenue, excluding straight- 113 653 80 122 17 783 211 558
line rental revenue
adjustment
Straight-line rental 19 616 8 510 2 381 30 507
revenue adjustment
Property expenses (16 748) (20 779) (971) (38 498)
Segment results 116 521 67 853 19 193 203 567
Net investment property 34 468 65 354 8 919 108 741
revaluation
Total segment results 150 989 133 207 28 112 312 308
Statement of financial
position extracts at 31
March 2012
Acquisitions prior to 976 500 545 800 174 200 1 696 500
listing
Acquisitions after listing 151 000 74 900 - 225 900
Developments and capital 746 3 006 - 3 752
expenditure
Gross investment property 54 354 73 594 11 300 139 248
fair value adjustment
Non-current assets 1 182 600 697 300 185 500 2 065 400
Other current assets not - - - 16 634
managed on a segmental
basis
Total assets as at 31 March 2 082 034
2012
Notes to the reviewed preliminary condensed financial statements
For the year ended 31 March 2012 2012
R`000
1 FAIR VALUE ADJUSTMENTS
Gross investment property fair value adjustment 139 248
Less: Straight-line rental revenue adjustment (30 507)
Net investment property revaluation 108 741
Fair value adjustment - loss on interest rate swap (1 169)
derivatives
Fair value adjustment before debenture fair value 107 572
adjustment
Debenture fair value adjustment (138 079)
(30 507)
1.1 Debenture fair value adjustment
Debentures are adjusted to fair value which represents the
net asset value attributable to the Investec Property Fund
Limited`s ("Fund") debenture holders.
The adjustment consists of:
Fair value adjustment on other assets and liabilities (107 572)
Straight-line rental revenue adjustment (30 507)
(138 079)
2 RECONCILIATION OF ATTRIBUTABLE INCOME TO DISTRIBUTABLE
EARNINGS
Total comprehensive income attributable to equity holders 109
Debenture interest 158 026
Distributable earnings 158 135
Distribution comprises:
Debenture interest 158 026
Ordinary dividend 109
Total distribution 158 135
Number of
linked units
Linked units in issue at end of the year 170 000 000
Weighted average number of linked units in issue 170 000 000
Cents
Distribution per linked unit 93,02
Interest on debentures 92,96
Dividend 0,06
Distribution for the year 93,02
Interim distribution for the six months ended 30 September 43,73
2011
Final distribution for the six months ended 31 March 2012 49,29
3 EARNINGS PER SHARE
Reconciliation of basic earnings to headline earnings:
Total comprehensive income attributable to equity holders 109
Less: Net fair value adjustment - investment property (88 646)
Fair value adjustment (108 741)
Applicable taxation 20 095
Headline loss attributable to shareholders (88 537)
Add: Net fair value adjustment - debentures 112 346
Fair value adjustment 138 079
Applicable taxation (25 733)
Add: Debenture interest paid 158 026
Headline earnings attributable to linked unitholders 181 835
Cents
Basic earnings per share 0,06
Headline loss per share (52,08)
Headline earnings per linked unit 106,96
4 ORDINARY SHARE CAPITAL
Issued
170 000 000 ordinary shares with a nominal value of 1 cent 1 700
each
In terms of the memorandum of association and the
debenture trust deed, each ordinary share is linked to one
unsecured variable rate subordinated debenture of 999
cents. This linkage means that each share may only be
issued and traded together with the debenture with which
it is linked, until such time that it is de-linked in
accordance with the terms of the memorandum of association
and the debenture trust deed.
5 DEBENTURES
170 000 000 variable rate, unsecured, subordinated
debentures:
Issued during the year 1 698 300
Fair value adjustment 138 079
Fair value 1 836 379
The rights of the debenture holders to repayment of
capital are subordinated to the claims of all other
secured and unsecured creditors. The interest payable on
the debenture in each linked unit will be at least 999
times the dividend payable on each share.
Facility Interest rate 2012
R`000 R`000
6 OTHER NON-CURRENT
LIABILITIES
Variable rate loans -
unsecured
Bridge loan facility 500 000 Jibar + 2.25% 56 000
Working capital facility 20 000 Jibar + 2.25% -
Vendor loan:
BAT acquisition Jibar + 2,25% 40 000
Scientific acquisition Call rate 34 900
Total nominal value of 130 900
interest-bearing loans
Fair value adjustments on 1 169
interest rate swap derivatives
Fair value of long-term 132 069
interest-bearing loans and
derivatives
Less: Portion repayable within (130 900)
the next 12 months - at
nominal value
Total non-current liabilities 1 169
2012
R`000
7 CASH GENERATED FROM OPERATIONS
Operating profit 191 709
Straight-line rental revenue adjustment (30 507)
Working capital movement 12 284
Trade and other receivables (12 064)
Current liabilities 24 348
173 486
8 RELATED PARTY TRANSACTIONS
8.1 Investec Limited is the controlling shareholder shareholder of the Fund and
its wholly-owned subsidiary Investec Property (Pty) Limited is the Asset and
Property Manager of the Fund and therefore, Investec Limited and its
subsidiaries are deemed to be related parties to the Fund. All related party
transactions are conducted at arm`s length.
On 1 April 2011 the Fund acquired 29 properties from various wholly-owned
subsidiaries of Investec Limited, as follows:
Office Industrial Retail Total
Number of properties 7 18 4 29
Gross lettable area 89 469 244 637 34 424 368 530
(GLA)/(mSquared)
Cost of acquisition (R`000) 976 500 545 800 174 200 1 696 500
Since 1 April 2011 the Fund
has acquired three
properties from subsidiaries
of Investec Limited, as
follows:
Number of properties 1 2 - 3
Gross lettable area 15 500 18 903 - 34 403
(GLA)/(mSquared)
Cost of acquisition (R`000) 151 000 74 900 - 225 900
R`000
8.2 Investec Property (Pty) Limited
Asset management fee (9 157)
In respect of the unlet space in 345 Rivonia Road, Investec 11 991
Property (Pty) Limited has undertaken to pay to the Fund
the gross rental in respect of the unlet space for a period
up to 1 April 2014. Amount received in the current year
8.3 Investec Bank Limited
Rental received in respect of the Durban office 18 247
Sponsor fee (150)
8.4 The current portion of non-current liabilities includes
transactions with related parties including vendor loans
with wholly-owned subsidiaries of Investec Limited and a
bridge loan facility with Investec Bank Limited. The Fund
also holds its call accounts and fixed deposit accounts with
Investec Bank Limited and earns interest income thereon.
Borrowings
Vendor loans (74 900)
Bridge loan (56 000)
Interest on related party borrowings (6 034)
Cash accounts
Cash held on call account 4 567
Finance income 3 016
8.5 Borrowings advanced to Directors Amount Outstanding Units
to acquire linked units in the Fund advanced at year-end held
R`000 R`000
Sam Hackner 30 001 20 433 3 689 474
Sam Leon 12 501 8 587 1 504 789
Both loans provided by Investec
Securities Limited are over 36 months
and interest is payable semi-annually
at 8,25% per annum.
BASIS OF ACCOUNTING
The reviewed preliminary condensed financial results for the year ended 31 March
2012 have been prepared in accordance with the recognition and measurement
criteria of International Financial Reporting Standards ("IFRS"), the
presentation and disclosure requirements of IAS 34, Interim Financial Reporting
and AC 500 standards issued by the Accounting Practices Board and the
requirements of the Companies Act, 71 of 2008. The company`s accounting policies
as set out in the Fund`s pre-listing statement and those applied at the interim
stage have been consistently applied.
These reviewed preliminary condensed financial results have been prepared under
the supervision of Dave Donald, CA(SA) and David Tew, CA(SA).
Commentary
Introduction
The Fund listed in the "Real Estate Holdings and Development" sector of the JSE
Limited ("JSE") on 14 April 2011. At listing the initial property portfolio of
the Fund comprised 29 properties in South Africa with a total GLA of 368
530mSquared acquired for a total purchase consideration of R1 696,5 million,
which were independently valued at R1 771,0 million.
A key objective at this stage of our life cycle is to grow our asset base to
maximise economies of scale, create a portfolio effect to mitigate risk and to
position the Fund to effectively compete for new acquisition opportunities.
Consequently a key focus area with dedicated people is to continually seek
investment opportunities to expand the portfolio while continuing to
professionally asset manage the property portfolio, thus optimising returns to
our linked unitholders over time.
Although not all included in the results from a timing perspective, the Fund has
during its first year increased its asset base by R490,0 million (28,9%
increase from the acquired cost of the initial portfolio) by the acquisition of
5 high-quality properties. Our strategic focus expressed from the outset is that
we are a property-orientated business and that aggressive acquisitions may be
made from time to time if thought to have long-term benefits. Also, we look to
acquire good real estate rather than look to balance by sector or geography,
while acknowledging that our portfolio at listing was underweight retail. Our
acquisitions have been both financially enhancing and enhancing to our portfolio
in general as well as to our retail portfolio.
Of the 5 acquisitions, 3 were effective in the current year, adding R225,9
million to the value of the property portfolio. Taking into account the current
year`s revaluation of the property portfolio of R139,2 million, and capital
expenditure of R3,8 million, this brings the total property portfolio at year-
end to 32 properties with a total GLA of 406 706mSquared and a value of R2 065,4
million; a total increase in assets of 21,7%. Following transfer of the 2
remaining acquisitions of R264,1 million, which is anticipated to be in the
first quarter of the next financial year, the total property portfolio will
comprise 34 properties with a total GLA of 431 447mSquared and a value of R2
329,5 million; a total increase in assets of 37,3%.
At listing our linked units were initially placed at a price of R9,50 per linked
unit and closed at year-end at R11,70 per unit. Factoring in the interim
distribution of 43,73 cents per unit ("cpu"), linked unitholders who invested at
the listing have achieved a total return of nearly 28%.
Commentary on results
Following our initial distribution of 43,73 cpu the Board of Directors ("Board")
is pleased to announce a final distribution of 49,29 cents cpu for the year
ended 31 March 2012 bringing the total distribution for the year to 93,02 cpu.
This exceeded our initial estimate of 89,94 cpu by approximately 3,4%. As the
Fund was dormant before listing and only took effective control of the initial
property portfolio from the beginning of the financial year under review, no
comparative results are presented.
The independent revaluation of our property portfolio has resulted in a R139,2
million fair value adjustment; an 8,2% increase on the initial property
portfolio. The Board has in certain instances continued to take a conservative
view on valuations having not recognised revaluation adjustments on vacant space
and undeveloped bulk, both of which are valued by the independent valuers.
Consequently the fair value attributed to the total property portfolio by the
Board is R62,4 million less than that attributed by the independent valuers.
The Fund`s property portfolio comprises a high proportion of single tenanted
properties with quality clients and given this defensive portfolio, our
performance has been resilient. As always, client retention and renewals of
expiring rentals have been a key focus and we have been successful in this
regard, showing a 2,7% vacancy at year-end from the 3,7% vacancy at listing. The
vacancy remains solely in the industrial portfolio (4,1% of the industrial
portfolio by GLA).
During the period, the Fund has successfully re-negotiated various expired
leases for renewal with certain of these achieving positive rental reversions.
We have further been successful in letting out vacant space. Key successes for
the year include:
- In the industrial portfolio a new letting of 21 565mSquared in Alrode to a
major international company and 1 594mSquared to a major listed client at an all
in 67% positive reversion as this space was previously under rented.
- In our office portfolio, a new letting of 4 000mSquared in 345 Rivonia Road,
Sandton to a high-quality client with the rental achieved exceeding the rental
guarantee provided by Investec Property. The rental accrues to the Fund from May
2012.
- In respect of 4 Protea Place in the Sandton CBD a renewal for the entire
building for a further period of 5 years commencing 1 March 2013 at 5,9%
positive reversion. As part of the renewal and client retention process, the
Fund will invest R19 million to both refurbish the building as well as provide
additional parking in meeting the clients` requirements.
Overall the sectoral vacancies
at year-end were as follows:
Total GLA Leased Vacant Vacancy
(mSquared) (mSquared) (mSquared) (%)
Office 104 067 104 067 - -
Industrial 268 060 256 942 11 118 4,1
Retail 34 579 34 579 - -
Total 406 706 395 588 11 118 2,7
The table below provides a summary of lease expiries, renewals and new leases
during the year:
Expiries and Average Renewals
cancellations gross expiry and new
rent leases
(mSquared) (RmSquared) (mSquared)
Office 20 892 66,36 20 950
Industrial 79 786 24,28 86 918
Retail 11 236 53,96 11 236
Total 111 914 35,12 119 104
Average
gross rent on Average
renewals and escalation
new leases
(RmSquared) (%)
Office 70,09 8,1
Industrial 34,01 9,4
Retail 57,85 10,0
Total 42,61 9,2
Of the Office renewals 6 759mSquared is a one-year lease to July 2012 and
therefore the escalation only applies to the balance of the re-let space.
The following table sets out the pattern of expiries, renewals and new leases
for the year under review within the context of an overall reconciliation of the
change in the GLA of the Fund`s portfolio:
GLA at Expiries Renewals
31 March and and new
2011 cancellations leases
(mSquared) (mSquared) (mSquared)
Leased 354 799 (111 914) 119 104
Vacant 13 731 35 777 (40 210)
Total 368 530 (76 137) 78 894
Additions Net GLA at
GLA 31 March
adjustments 2012
(mSquared) (mSquared) (mSquared)
Leased 34 403 (804) 395 588
Vacant - 1 820 11 118
Total 34 403 1 016 406 706
The forward lease expiry profile of the Fund`s portfolio for years ending 31
March is detailed below, categorised as to office, industrial and retail, which
reflects an evenly distributed pattern of lease expiries:
2013 2014 2015 2016 2017 Thereafter
Office 1,7% 1,2% 7,3% - 4,5% 15,1%
Industrial 16,6% 12,5% 12,6% 3,0% 10,4% 6,3%
Retail 1,1% - 0,1% 0,8% 6,8% -
Total 19,4% 13,7% 20,0% 3,8% 21,7% 21,4%
Unitholders
Investec Limited is the only unitholder holding in excess of 5% of the Fund`s
total issued linked units at 31 March 2012, with a 50,01% holding thereof.
Number of unitholders 1 817
Property costs
The cost to income ratio for the Fund is calculated on the basis where revenue
includes: billings for contractual rental income, contractual operating cost
recoveries, rates recoveries and turnover rentals whilst the full expense is
included as property expenses (except for utility expenses which are reflected
net of recoveries). On this basis the net cost to income ratio is 18,2%. Should
utility expenses be reflected on a gross basis with the recovery reflected in
revenue the cost to income ratio would be 26,0%.
Despite rapidly escalating electricity and rates charges, the net cost to income
ratio is relatively low as the rate of operating cost recovery from clients has
been maintained during the year. Even where we are able to recover these
administered costs from our clients, the escalations still increase the total
occupancy costs for our clients. In addition, the low cost to income ratio
reflects the fact that the Fund has a high proportion of single tenanted
properties where municipal charges are paid directly by the client to the
relevant authorities.
Acquisitions
During the year under review we announced the acquisition of 5 properties which
will increase the property portfolio by R490,0 million; an increase in assets of
28,9% from the acquired cost of the initial portfolio, including the
redevelopment being undertaken for General Electric. Once these acquisitions are
concluded this will bring the total portfolio to 34 properties. All acquisitions
are anticipated to contribute positively to the results and distributions of the
Fund in the forthcoming year.
A brief summary of the acquisitions and their current status is as follows:
- The Innovation Group building was acquired for R151 million at a 9,75% forward
yield and is situated at 192 Bram Fischer Drive, Randburg. This property was
refurbished by Investec Property (Pty) Limited in accordance with the client`s
specifications and provides 15 500mSquared of quality B-grade office
accommodation over 9 floors and two basements providing 516 parking bays and
storage space. The Innovation Group, a wholly-owned subsidiary of Innovation
Group plc, occupies the entire building with a 10-year rental agreement and an
8,0% annual escalation. The effective date for this acquisition was 1 October
2011 notwithstanding, transfer date, with the Fund required to pay interest on
the vendor loan at a call rate until transfer took place in December 2011.
- The Scientific Building was acquired for R34,9 million at a 10,0% forward
yield and is situated in the new Cosmo Business Park, just north of Kya Sands,
Gauteng. This property provides 5 733mSquared of industrial and auxiliary office
space and is fully let to the Scientific Group on a 7-year lease with an 8,0%
annual escalation. The Scientific Group provides diagnostic and medical
equipment to the health industry. The effective date for this acquisition was 1
October 2011, notwithstanding transfer date, with the Fund required to pay
interest on the vendor loan at a call rate until transfer takes place. We
anticipate that transfer will take place in the first quarter of the next
financial year.
- In October 2011 we announced the acquisition of Great North Road Plaza in
Musina situated in the Limpopo Province to the value of R145 million. This
property provides 13 561mSquared of retail space, 88,0% of which is let to
national tenants. It is anticipated to yield 9,2% in the first year and transfer
of this property is anticipated in the first quarter of the next financial year
following receipt of the necessary competition approval.
- In November 2011 we announced the acquisition of the General Electric Building
located at 130 Gazelle Street, Corporate Park, Midrand for a total purchase
consideration including redevelopment costs of approximately R119,1 million at a
9,0% initial forward yield. Investec Property (Pty) Limited will undertake the
refurbishment of the building on behalf of the Fund. The property provides 11
180mSquared of office and industrial space and is fully let under an 8-year
lease with an 8,5% escalation to General Electric South Africa. Transfer of this
property is anticipated in the first quarter of the next financial year.
- In March 2012 we announced the acquisition of the British American Tobacco
(BAT) Building located at 285 Maggs Street, Waltloo, Pretoria for a total
purchase consideration of R40 million at a 10,25% forward yield. The Property is
an industrial warehouse facility providing 13 170mSquared of GLA comprising 87%
warehouse space and 13% of office space. The property was specifically
redeveloped for BAT South Africa who is the sole tenant. The lease is for 5
years escalating at 8%, with the option to renew for a further five years
thereafter. Any rates increases above 8% are recoverable from the tenant. In
terms of the lease the Fund will be responsible for insurance and repairs and
maintenance. The effective date for this acquisition was 1 December 2011,
notwithstanding transfer date, with the Fund required to pay interest on the
vendor loan at Jibar plus 225 bps until transfer takes place, which is
anticipated in the first quarter of the next financial year.
No properties were disposed of in the year under review.
Fair value adjustments
The independent revaluation of our property portfolio resulted in a R139,2
million increase in the value of our portfolio. Valuations are conducted
annually by independent valuators and we believe fairly reflect the open market
value of the properties, with each property being independently valued at least
every 3 years. The increase in fair value is primarily due to the escalation of
rentals over the period.
In certain instances, a lower valuation than the independent valuation was
adopted by the Board as it takes a conservative view on valuations and does not
recognise the valuation attributable to vacant space where there is any
uncertainty in the short-term ability to let this space and any value
attributable to undeveloped bulk, both of which are valued by the independent
valuers. Consequently the fair value attributed to the total property portfolio
by the Board is R62,4 million less than that attributed by the independent
valuers. The total fair value adjustment attributed to investment properties is
reduced by the total straight-line rental revenue adjustment that has already
been attributed to the fair value of the investment properties.
The debentures forming part of our linked units are reflected at fair value
which represents the net asset value attributable to debenture holders. In terms
of the debenture trust deed, the interest payable on the debentures is always at
a minimum 999 times the dividend payable on the ordinary shares. Ultimately all
the fair value adjustments on the assets and liabilities of the Fund are
therefore attributable to the debentures. Consequently the net effect of the
fair value adjustments on investment property, borrowings and derivative assets
is adjusted to the fair value of the debentures.
Arrears
Receivables have been tightly managed for the year and at year-end, arrears were
limited to R1,4 million; representing 0,7% of total collectables. A provision of
R1,2 million has been provided for potential bad debts.
Borrowings
The Fund was ungeared at listing to provide a strong acquisitive platform. To
finance the acquisitions we have raised a bridge loan of R500 million and a
working capital facility of R20 million to fund capital expenditure. Both
facilities have been provided by Investec Bank Limited and we are paying a
margin of 225 bps above Jibar. There are no commitment or facility fees on the
undrawn facilities.
Of the acquisitions only Innovation (R151,0 million) transferred before year-end
which was funded from the bridge loan. The cash generated by the Fund in the
second half of the year was used to reduce this loan to minimise the finance
costs of the Fund. With the Scientific (R34,9 million) and BAT (R40,0 million)
acquisitions being effective in the current year we have included these
properties in our property portfolio and raised the corresponding vendor loans
of R74,9 million, bringing the total borrowings to R132,1 million at year-end,
including the fair value adjustment of R1,2 million on our fixed for variable
interest swap derivative instrument.
After year-end we registered a R1 billion domestic medium-term note ("DMTN")
programme and successfully placed R450 million of secured notes, the proceeds of
which will be used to repay the outstanding borrowings and the balance of the
acquisitions, other than BAT. As part of this programme we obtained a BBB+
credit rating on an unsecured basis and an A for the secured notes which we
issued. These notes were placed at an all in rate of 8,3% providing an
attractive medium-term debt facility for the Fund.
At listing we indicated a maximum gearing level of 50% loan to value ratio
("LTV"), although we will target an LTV between 30% - 40%. At year-end the LTV
of the Fund was 6,2%, however taking into account that this includes the cash to
be distributed to linked unitholders the effective LTV is 10,2%. Once all
acquisitions have been concluded the LTV will be 20,4%.
With the primary purpose of the Fund being to invest in real estate the Board
has taken the decision not to speculate in interest rates on our borrowings and
have established a policy that a minimum of 75% of total borrowings be fixed. At
year-end with only the Innovation acquisition (R151 million) having transferred,
the Fund took out a fixed interest rate derivative providing nominal cover of
R113,3 million for this exposure. The fixed rate obtained was 7,15% which has
been factored into our determination of the all in borrowing cost of the Fund of
8,3% above. As alluded to earlier there was a R1,2 million fair value adjustment
on this derivative instrument at year-end.
Post-balance sheet events
Other than the registration of the DMTN programme and the issue of R450 million
of secured notes after year-end as described above, there have been no material
events that occurred between the year-end and the date of these reviewed
preliminary condensed financial results that would have a material effect on the
financial results of the Fund.
Sustainability and prospects
Sustainability is a key business imperative for the Fund. The Board will
continue to manage the areas of risk that fall under its direct control and will
seek to manage the property portfolio to enhance value for stakeholders and to
provide quality space for our clients. Future investment will be targeted at
attractive properties that provide stable rental income and good growth
prospects over time.
The Board expects that the renewal of tenancies in the year ahead will continue
to be challenging and, accordingly, client retention will remain a high
priority. Given this environment, but taking the announced acquisitions into
account and ignoring any future acquisitions, the Board believes that the Fund
should be able to deliver growth in distributions for FY2013 in the region of
8%.
This forecast is based on the assumptions that the macro-economic environment
will not deteriorate markedly, no major corporate failures will occur, budgeted
renewals will be concluded and that clients will be able to absorb the recovery
of rising rates and utility costs. Budgeted rental income was based on
contractual escalations and market-related renewals.
The information and opinions contained above are recorded and expressed in good
faith and are based upon sources believed to be reliable. No representation,
warranty, undertaking or guarantee of whatever nature is made or given
concerning the accuracy and/or completeness of such information and/or the
correctness of such opinions.
This forecast has not been reviewed or reported on by the Fund`s independent
external auditors.
On behalf of the Board of Investec Property Fund Limited
Sam Hackner Sam Leon
Chairman Chief Executive Officer
17 May 2012
Review conclusion
Ernst & Young Inc., the Fund`s independent auditors, have reviewed the
preliminary condensed financial results and have expressed an unmodified review
conclusion on the preliminary condensed financial results, which is available
for inspection at the company`s registered office.
Distributions
Interim dividend number 1 of 0,029 cents and debenture interest payment number 1
of 43,705 cents totaling 43,734 cents per linked unit were declared for the six
months ended 30 September 2011 and were paid on 12 December 2011.
Notice is hereby given of final gross dividend declaration number 2 of 0.035
cents (after applying the dividend withholding tax of 15% would provide a net
dividend of 0.0298 cents) and debenture interest payment number 2 of 49,252
cents per linked unit totaling 49,287 cents per linked unit for the year ended
31 March 2012, payable to holders of the linked units as recorded in the books
of the company at the close of business on Friday, 29 June 2012.
Issued Share Capital: 170 000 000 ordinary shares with a nominal value of 1 cent
each
Income tax reference number: 9332/719/16/1
The salient dates relating to the final distribution are as follows:
Last day to trade in order to participate in the Friday, 22 June 2012
distribution
Linked units to trade ex distribution Monday, 25 June 2012
Record date Friday, 29 June 2012
Distribution posted/paid to certificated linked Monday, 02 July 2012
unitholders
Accounts credited by CSDP or broker to Monday, 02 July 2012
dematerialised linked unitholders
Linked units may not be dematerialised between Monday, 25 June 2012 and Friday,
29 June 2012, both days inclusive. The above dates and times are subject to
amendment. Any such amendment will be released on SENS and published in the
press.
By order of the Board
Investec Bank Limited
Company Secretary
17 May 2012
Directors
S Hackner* (Chairman)
SR Leon* (Chief Executive Officer)
MP Crawford# (Lead Independent Director)
DAJ Donald* (Chief Financial Officer)
S Mahomed#
CM Mashaba#
MM Ngoasheng#
GR Rosenthal#
* Executive
# Independent non-executive
Changes to the board
S Mahomed has been appointed to the Board effective 14 May 2012.
Registered office
C/o Company Secretarial Investec Limited
100 Grayston Drive, Sandown, Sandton, 2196
PO Box 785700, Sandton, 2146
Transfer secretary
Computershare Investor Services (Pty) Limited
(Registration number 2004/003647/07)
Ground Floor, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Sponsor
Investec Bank Limited
100 Grayston Drive, Sandown, Sandton, 2196
PO Box 78949, Sandton, 2146
For a copy of the Fund`s results, refer to the website:
http:/www.investecpropertyfund.com
Date: 17/05/2012 07:30:03 Produced by the JSE SENS Department.
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