Real Estate Investor Magazine South Africa May/June 2019 | Page 48

REITS
Fairvest outshines REIT market
GROWTH BETWEEN 8 AND 10%
Highlights for six months to 31 December
2018
Fairvest Property Holdings Limited announced solid
results for the six months to December 2018, with interim
distributions increasing by 8.3% to 10.616 cents per share.
•
Top performing SA REIT with 25.7% annual total
return to shareholders
•
Distribution for period increased by 8.3% to 10.616
cents per share
•
Total property portfolio increased by 5.1% to R3.14
billion
•
Net asset value increased by 2.3% to 232.98 cents per
share
•
Vacancies contained at 3.5% of total lettable area
•
Like-for-like annualised net property income
increased by 6.4%
•
Tenant retention remain high at 79.8%
•
Distribution growth of 8% to 10% expected for full
year to 30 June 2019
CEO, Darren Wilder said: “Fairvest’s focus on a
differentiated sector of the market and its unrelenting drive
to excel at property fundamentals, have allowed investors to
reap the rewards of consistency. Low vacancies and arrears,
high tenant retention and solid growth in net property income
continue to deliver distribution growth at the top end of the
market. “
Fairvest maintains a unique focus on retail assets weighted
toward non-metropolitan and rural shopping centres, as well
as convenience and community shopping centres servicing
the lower income market in high growth nodes, close to
commuter networks. The Fairvest property portfolio consists
of 45 properties, with 241 214m² of lettable area valued at
R3.14 billion.
Property fundamentals
The portfolio remains well diversified across South Africa,
with the four largest provinces, Gauteng, KwaZulu-Natal,
Western Cape and Free State contributing 77.6% of revenue.
The high national tenant component of 74.8% of the portfolio
provides shareholders with a low risk investment profile, with
national food retailers occupying 34.1% of the portfolio.
Vacancies were contained at 3.5% or 8 520m² during the
period, with 99 new leases concluded covering 11 064m².
Fairvest successfully renewed 19 929m² of leases, with a modest
negative reversion of 0.5% being achieved on these renewals,
in return for tenant retention of 79.8% and a lengthening of
the lease expiry profile.
Prospects
The company said that the retail trading environment in South
Africa remains under pressure however, retail assets servicing
and trading in the lower LSM sector continue to show more
resilience than the balance of the retail sector.
Photo, CEO Fairvest, Darren Wilder
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MAY/JUNE 2019 SA Real Estate Investor Magazine