Sisa Ngebulana, CEO, Rebosis
Rebosis Property Fund, the JSE’s first listed black-managed REIT, today released robust annual financial results for the year ended 31 August 2015. The results show stable growth in earnings on the back of successful organic growth and contained costs, despite quality acquisitions that were dilutionary.
The Fund declared an 11.0% increase in distribution of 110.41 cents per share for the financial year under review. This comprise a distribution of 52.46 cents per share reported during the first half of the year and a 57.95 cents per share distribution for the second half of the financial year.
Rebosis Chief Executive, Sisa Ngebulana commented: “The record distribution growth reported is as a result of growth in the value of our existing portfolio, containment of operating costs and good Rand return on the New Frontier investment.
“Going forward we will continue to execute our strategy of building a diversified, resilient portfolio yielding strong income and capital growth for our shareholders.”
At year-end the Fund’s assets under management were R9.8 billion (2014: R7.6 billion) of which the value of the Rebosis’ direct properties were R7 billion. The effective holding of 59% in Ascension Properties Limited (‘Ascension’) and 62% in New Frontier Properties (‘New Frontier’) represented listed property securities of R2.7 billion (2014: R598 million).
Rebosis acquired a 32,1% interest in the shares of Ascension for R638,6 million in the previous financial year. In pursuit of its intention to acquire 100% of Ascension, in May 2015, the Rebosis linked unit capital structure was replaced with an all share arrangement which facilitated a share swap, executed in July 2015, for 100% of Ascension’s B unit linked capital, increasing its stake to 59,0%. Required approvals for a similar transaction from holders of Ascension’s A shares were not obtained resulting in Ascension’s continued listing, as a subsidiary of Rebosis. Kameel Keshav has since been appointed CEO of Ascension.
“Ascension is a focused commercial fund with a strong sovereign underpin and brings geographic diversification to the Rebosis Group portfolio.
“Ascension changed their financial year end to align with Rebosis and the fund has performed well for the two months trading to 31 August 2015. Annualised distribution growth for the B shares were 10.3% over this period. This was after the settlement of the 5% annual growth commitment for the A shares,” commented Kameel Keshav, Chief Executive of Ascension.
Rebosis acquired 62,0% of New Frontier for a total purchase price of R1,18 billion in March 2015. New Frontier has three high-street retail centres, in Burton-on-Trent, Middlesbrough and Blackpool. The acquisition of Houndshill Shopping Centre in Blackpool was concluded post year-end for a purchase price of £105m.
Mike Riley, Chief Executive of New Frontier commented: “New Frontier’s mandate is to invest exclusively in UK shopping centres and our GBP-denominated acquisition pipeline should provide significant opportunities for value enhancement in future.
“We believe that we are well positioned in the UK with good quality, retail assets that meet the specific needs of the surrounding communities.”
The current Rebosis portfolio comprise balanced exposure to the retail, office and industrial sectors with 40% of the portfolio invested in retail and 56% in office with a strong sovereign underpin.
Commenting on the company’s prospects, Ngebulana concluded: “We will continue to identify and acquire quality assets in line with our investment guidelines with a medium to long-term focus on the retail sector.
“Our portfolio fundamentals remain strong amidst a challenging economic environment. We believe we are well positioned to ensure solid future growth through completed tenant mix optimisations.”
Rebosis expects distribution growth for the 2016 financial year to be between a forecasted range of 8 to 10%.