Delta Property Fund, a black-managed and substantially black-owned property fund with significant exposure to government tenanted offices, today reported its interim results for the six months ended 31 August 2013.
Delta achieved distributable earnings of R116.7 million with an accrued distribution per linked unit of 32.51 cents which was supported by rental growth and market related contractual rental escalation of approximately 8%.
Sandile Nomvete, CEO of Delta Property Fund commented, “In the year since listing, we have managed to deliver on the high-growth mandate from our unitholders and we are pleased with the underlying performance of the portfolio over the past six months.”
In line with its mandate to grow the portfolio to R7 billion by 2017, the fund invested in 29 yield enhancing properties valued at R2.7 billion to bring the combined portfolio of 49 properties with a total Gross Lettable Area (‘GLA’) of 477 680m2 to R4.8 billion, a 128.4% increase since listing on the JSE Limited in November 2012.
The Fund has remained consistent in its strategy to operate as a predominantly government tenanted fund with 64.6% of gross income being derived from the government office sector. The remaining 35.4% is split between other offices (25.5%), retail (6.3%) and industrial (3.5%).
Subsequent to 31 August 2013, Delta took transfer of a further 5 properties for a combined purchase consideration of R548 million. The weighted average rental of these A and B grade acquisitions is R132.95/m2.
“The successful bond issue and the additional funding facilities secured during the period have enhanced Delta’s financial position and although it is not the primary focus in the short term, we continue to manage opportunities and have a solid pipeline of quality prospects to enhance and bulk up our portfolio,” added Bronwyn Corbett, CFO and COO of Delta Property Fund.
During the period, the company secured an additional R1.3 billion in bank facilities to support the growth in the property portfolio and also tapped into the debt capital markets to issue a R2 billion unsecured domestic medium term note programme with a rating of BBB+ (long term) and A2 (short term). A total of R190 million was issued under the programme during the period.
“Looking forward, our strategy to grow a sustainable, yield enhancing, portfolio with a sovereign underpin remains unchanged and we will continue to focus on remaining a landlord of choice for both SARS and government through market related rentals and quality buildings,” concluded Nomvete.
The Fund’s target distribution for the year ending 28 February 2014 remains at 72.50 cents. Delta’s application for REIT status was approved by the JSE Limited with effect from 01 March 2014.