Property loan stock firm has top-grade space
PROPERTY loan stock company Rand Leases Properties reported a 12,5% increased distribution to 22,5c a share in the 12 months ended June, up from 20c in the previous period.
The group said these results showed the effect of the aggressive expansion drive it launched this year.
Rand Leases' expansion strategy began with a R121,9m acquisition of office properties in Bruma, Illovo Boulevard, Wierda Valley and Sunninghill.
As a result of this acquisition, turnover was boosted to R83,5m from R65,8m and operating profit more than doubled to R21,5m from R10m. The group recently concluded a deal to acquire other properties worth R205,8m.
Rand Leases MD Grant Fischer said that all suspensive conditions for these acquisitions had been fulfilled, and approval by shareholders was scheduled for this month.
'The transaction will enable us to achieve our goal of generating almost 80% of income from recurring sources,' said Fischer.
These properties, situated in Bryanston, Sandton, Houghton and Hyde Park, mostly had five-year lease agreements, he said.
The acquisitions form part of a strategy to create a quality decentralised property portfolio that will deliver a good yield going forward.
Fischer said these properties, combined with the latest acquisitions, had transformed Rand Leases from a land developer to an annuity-style property loan stock company owning a combination of A-grade office and retail space valued at R372/m².
'This development, combined with the biannual distribution to be introduced during financial 2002, will help to continue the upward trend which has seen our share price increase by more than 200% in the past two years,' Fischer said.