RESILIENT real estate investment trust (Reit) boosted its interim dividend 25.2%, thanks to strong performances from its domestic and offshore property investments, as well as the effects of capital raisings and the weak rand.
The strong results for the six months to December reflected the effect of capital raisings, particularly a rights issue last June that reduced its cost of funding, the decline in the value of the rand and a solid performance from the property portfolio.
Resilient invests in dominant regional retail centres with a minimum of three anchor tenants and then lets predominantly to national retailers. It achieved net rental income growth of 7.6% from its direct property portfolio of shopping centres, a strong return in a difficult retail environment in SA.
"Despite the challenging economic environment, Resilient’s portfolio of retail properties continues to perform well.
"Retail sales growth at Resilient malls is ahead of national retail sales growth and were ahead of the board’s expectations," the group said.
The group’s overall performance was also boosted by dollar income earned from its offshore investments.
Resilient also holds stakes in commuter shopping centre and industrial asset owner Fortress Income Fund, Romanian shopping centre owner New Europe Property Investments (Nepi), Polish-focused Rockcastle and in UK shopping centre investor Hammerson.
Resilient declared a dividend of 232.46c per share for the half-year to December. This represented a 25.2% increase over the 185.62c per share declared in December 2014. Of this growth, 7% was attributable to the effect of capital raisings.
A further 8% was due to dividends from Fortress B that were ahead of budget, and Nepi and Rockcastle, which benefited from rand depreciation. In terms of performance last year and so far this year, offshore-based property funds dominated the South African listed property landscape.
Fortress B shares achieved a 103% total return last year and were the sector’s best performer. Nepi followed with a total return of 62%. Rockcastle ranked 6th, with 49% and Resilient 9th, with 43%.
"Distribution growth of 25% is an exceptionally strong result.
"Even if we remove the impact of the deployment of the capital raise proceeds, the growth rate of 18% remains exceptionally strong," Evan Robins, listed property manager of Old Mutual Investment Group’s MacroSolutions boutique.
"True, the fund was helped by rand weakness’s impact on their non-SA listed holdings, but management must get the credit for diversifying aggressively offshore before it was fashionable and the dividend growth of these investments was good in local currency terms as well," he said.
A portfolio manager at Investec Asset Management, Peter Clark, said Resilient was a consistently good performer.
"The balance of the growth is largely external. However, management have a good track record of generating this on a consistent basis, which the market rewards with the premium rating," said Mr Clark.
Resilient is also the majority 60.94% partner of the Resilient Africa joint venture for the development of malls in Nigeria. The other partner is Shoprite Checkers.
By the end of December last year, Resilient had advanced R712m to Resilient Africa and had additional commitments totalling R397m. Resilient Reit CEO Des de Beer said the investment was a long-term strategy to build 10 malls in Africa’s most populous country.
"The investment in Nigeria is relatively small and business risks have increased. There are obvious downside risks to the country’s rating and currency. The distressed economic conditions have and will continue to yield attractive investment opportunities, which will be pursued providing investment criteria are met."
Property fund. Picture: THINKSTOCK
RESILIENT real estate investment trust (Reit) boosted its interim dividend 25.2%, thanks to strong performances from its domestic and offshore property investments, as well as the effects of capital raisings and the weak rand.
The strong results for the six months to December reflected the effect of capital raisings, particularly a rights issue last June that reduced its cost of funding, the decline in the value of the rand and a solid performance from the property portfolio.
Resilient invests in dominant regional retail centres with a minimum of three anchor tenants and then lets predominantly to national retailers. It achieved net rental income growth of 7.6% from its direct property portfolio of shopping centres, a strong return in a difficult retail environment in SA.
"Despite the challenging economic environment, Resilient’s portfolio of retail properties continues to perform well.
"Retail sales growth at Resilient malls is ahead of national retail sales growth and were ahead of the board’s expectations," the group said.
The group’s overall performance was also boosted by dollar income earned from its offshore investments.
Resilient also holds stakes in commuter shopping centre and industrial asset owner Fortress Income Fund, Romanian shopping centre owner New Europe Property Investments (Nepi), Polish-focused Rockcastle and in UK shopping centre investor Hammerson.
Resilient declared a dividend of 232.46c per share for the half-year to December. This represented a 25.2% increase over the 185.62c per share declared in December 2014. Of this growth, 7% was attributable to the effect of capital raisings.
A further 8% was due to dividends from Fortress B that were ahead of budget, and Nepi and Rockcastle, which benefited from rand depreciation. In terms of performance last year and so far this year, offshore-based property funds dominated the South African listed property landscape.
Fortress B shares achieved a 103% total return last year and were the sector’s best performer. Nepi followed with a total return of 62%. Rockcastle ranked 6th, with 49% and Resilient 9th, with 43%.
"Distribution growth of 25% is an exceptionally strong result.
"Even if we remove the impact of the deployment of the capital raise proceeds, the growth rate of 18% remains exceptionally strong," Evan Robins, listed property manager of Old Mutual Investment Group’s MacroSolutions boutique.
"True, the fund was helped by rand weakness’s impact on their non-SA listed holdings, but management must get the credit for diversifying aggressively offshore before it was fashionable and the dividend growth of these investments was good in local currency terms as well," he said.
A portfolio manager at Investec Asset Management, Peter Clark, said Resilient was a consistently good performer.
"The balance of the growth is largely external. However, management have a good track record of generating this on a consistent basis, which the market rewards with the premium rating," said Mr Clark.
Resilient is also the majority 60.94% partner of the Resilient Africa joint venture for the development of malls in Nigeria. The other partner is Shoprite Checkers.
By the end of December last year, Resilient had advanced R712m to Resilient Africa and had additional commitments totalling R397m. Resilient Reit CEO Des de Beer said the investment was a long-term strategy to build 10 malls in Africa’s most populous country.
"The investment in Nigeria is relatively small and business risks have increased. There are obvious downside risks to the country’s rating and currency. The distressed economic conditions have and will continue to yield attractive investment opportunities, which will be pursued providing investment criteria are met."
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