Spear Reit, a JSE-listed property fund focused on the Western Cape, has announced a 3.8% increase in its full-year distribution per share, amid ongoing challenges in the South African Reit sector.
The distribution per share for the year ending February rose to 78.86c from 75.97c a year earlier, with distributable income per share also rising by 1.04% to 82.99c.
The final distribution per share for the six months ended February increased by 4.37% to 40.53c.
Spear’s board declared an interim and final DPS for FY2023 totalling 75.97 cents per share.
Spear Reit reported successful lease renewals or re-letting of 153,383m2 of space, with a net asset value per share increase of 2.79% to R11.80 and revenue up 6.57% to R619 million.
The portfolio occupancy rate stood at 93.12%, with a decrease in loan-to-value to 31.6% from 36.3% the previous year.
The company continues to assess its core business, pursuing disposals of assets that no longer align with its long-term investment criteria, while maintaining sustainability efforts such as solar PV installations across 60% of its assets.
Looking ahead, Spear Reit plans to develop GTX Park in George, adding 30,000m2 to its portfolio.
Despite high asset prices in the Western Cape, the executive team remains focused on seeking value-accretive investment opportunities, including specialised asset classes like data centres, and pursuing strategic acquisitions.
The company recently completed a private placement of R313.5 million and entered into acquisition agreements with Emira Property Fund for 13 Western Cape assets valued at R1.146 billion, in line with its strategy to expand its real estate portfolio in the province.
“Spear’s Western Cape-only strategy continues to be proven sound as the Western Cape economy and real estate sector traverse the South African macroeconomic environment far better than the
other South African provinces," said group CEO, Quintin Rossi.
Rossi said that given the headway made by the Western Cape Provincial Government and the various municipalities of the
Western Cape, in particular the City of Cape Town, he anticipates the flow of private and institutional capital across the province will continue.
“The Western Cape Government remains intently focused to increase energy resilience within the province not only to mitigate the negative impact of loadshedding but also per Premier Alan Winde ‘to harness the immense potential the power generation sector, specifically the green economy, has in being able to stimulate growth, attract investment and create employment'."
Both the Western Cape Provincial Government and the City of Cape Town have recognised the densification impact of semigration and the pressure this places on infrastructure serving Western Cape citizens, the chief executive said.
"Estimates are that a further 1.5 million people will live in Cape Town by 2030. The City of Cape Town has recently launched a R120 billion infrastructure programme into water, sewerage and sanitation services over a 10-year period to cater for densification and population growth."
Shares in the group are up some 10% over the past year.
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