Mara Delta, (formerly Delta Africa), the first multi-listed property fund to offer international property investors direct access to immediate high growth opportunities on the African continent outside of South Africa, today announced robust financial results for the year ended 30 June 2016.
“Our strategy from the outset was to access emerging market yields, offsetting the associated risk with strong counter parties and dollar based leases. We are therefore pleased with the results which were achieved in a challenging global market,” commented Bronwyn Corbett, Chief Executive.
Mara Delta declared a final dividend of 5.58 US$ cents per share, which brings the total dividend for the year under review to 11.75 US$ cents. This represents distribution growth of 4.1%, in line with management’s guidance of between 3% and 6% on the prior year’s distribution.
“During the year we focused on optimizing our debt profile, closing finance deals with Investec Bank, Barclays Bank and Banco Unico. The successful conclusion of the Cosmopolitan Mall acquisition in Zambia will introduce an additional finance partner in the form of Bank of China, who committed a US$ 77 million facility for this transaction”.
“Together with our existing relationship with Standard Bank across the continent, these new finance partners place us in a strong position to access cost effective finance packages matched to our portfolio,” Corbett continued.
Accordingly, Mara Delta successfully raised debt facilities of US$ 142.2 million during the year under review, with the proceeds used to settle more expensive bridging facilities as well as to refinance the more expensive local currency vendor loan for Anfa Place Shopping Centre in Morocco.
The Company’s weighted average cost of debt subsequently reduced to 6.22% at year end from 6.94% in the comparative year, despite an increase in Libor rates during the period. The Group reported a weighted average cost of debt for the month of June 2016 of 5.66%, which management regards as the benchmark for the 2017 financial year.
“We continue to enjoy exceptional support from our key shareholders and have raised US$ 44.8 million through share placements at a premium to net asset value during the year. The proceeds of the issuance’s were utilized in part to pay for new acquisitions and to settle the merger costs with Pivotal’s African asset portfolio,” said Corbett.
Mara Delta diversified significantly during the year under review, both from a geographical and sectoral point of view. In addition, several pipeline acquisitions were negotiated during the year under review and are in various stages of transfer:
– The merger with Pivotal’s African asset portfolio resulted in Mara Delta taking transfer of a 45.5% stake in Buffalo Mall (retail) in Naivasha, Kenya.
– Zimpeto Square (retail) in Maputo.
– Bollore/Plexus warehouse (light industrial) in Pemba.
– Vale accommodation compound (residential) in Tete.
– a 50% interest in Makuba Mall (retail) in Kitwe.
– a 50% interest in Kafubu Mall (retail) in Ndola.
– a 50% interest in Cosmopolitan Mall (retail) in Lusaka.
– Barclays House (commercial offices) in Ebene.
Mara Delta on 22 August 2016 announced that it has entered into a non-binding heads of terms to acquire the Tamassa Resort in Bel Ombre, Mauritius from Lux Island Resorts Limited on a lease-back basis. This represents Mara Delta’s first foray into the hospitality market.
Due to the proposed sale of Pivotal to Redefine Properties Limited, Mara Delta and Pivotal mutually agreed not to proceed with the sale of the Oando Wings Office Complex in Nigeria.
Rental income from the portfolio increased substantially by 65.3% due to the full year impact of the assets acquired in the last quarter of the prior reporting year, as well as new acquisitions. The rental income included the impact of the US$ based rental escalations as well as the three yearly 10% rent escalations in Anfa Place Shopping Centre.
Operating costs as a percentage of revenue rose by 0.7% from 25.0% mainly as a result of concessions provided to tenants at Anfa Place Shopping Centre relating to the planned upgrade of the centre which is due to commence in 2017 as well as settling legacy tenancy issues.
“Going forward, our focus will remain on expanding our asset base in current countries of operation as well as growing into targeted jurisdictions. We are currently in negotiations that will extend our footprint into Uganda. Each country of operation provides a unique set of risks and we take a vast amount of time and care to understand these. Our Investment Charter and focus on cash flow management have proven to mitigate a number of these risks to an extent. We therefore remain confident of maintaining our distribution targets for 2017,” concluded Corbett.