Real Estate Investor Magazine South Africa November 2018 | Page 45

LISTED
assets under management and a net asset value of GBP 204
million (NAV per share of GBP 1.08 per share).
Atlantic Leaf produced a solid set of results for the period
under review. Earnings were up 5.5% and the Company declared
an interim distribution of 4.65 GBP pence per share, up 3.3%
over the prior year.
  Commenting on the results, CEO Paul Leaf-Wright
said:“Over this past 6 months we have focused on delivering our
earnings target whilst also refinancing a major portion of our
long-term debt. We are pleased to have been able to continue
to grow our distribution to shareholders. The property market
in the UK continues to perform well especially in the industrial
sector, where the majority of our assets are exposed.”
  In April 2018, Atlantic Leaf announced its plan to convert
to a UK REIT and redomicile to Jersey. These plans are well on
track with regulatory approvals and consents being obtained.
Commenting on the outlook for the Company, Leaf-Wright
continued:
 “The second half of the financial year will be challenging for
us due to the lower income from the Brecon asset as well as the
slightly higher cost of our new debt package which has increased
our cost of debt from 3.3% to 3.6% (UK interest rates having
increased slightly over the last few months).  The refinance
removes the risk of possible disruption in the finance market
that could be caused by Brexit in 2019 and 2020.  However, if we
covert to a REIT in November our full year distribution would
be nearer to 9,5 GBP pence and thus closer to the full 5% growth
target previously communicated.”   
Equites Property
Fund Limited an-
nounces growth of
11.7% in its distri-
bution
Equites remains the only
property fund listed on the
JSE that offers shareholders
pure exposure to modern
Andrea Taverna- Taurisan,
logistics assets, combined
CEO, Equites Property Fund
with a proven in-house
development expertise. Prime logistics has outperformed retail
and commercial property, with strong demand being driven by
the growth in e-commerce and retailers increasing efficiencies
through sophisticated distribution networks.
The group increased its portfolio value from R1.0 billion
to R10.1 billion in the four years since listing. Equites’ track-
record of double-digit distribution growth, as well as strong
net asset value growth continues to be acknowledged by
investors, again awarding it the position of top performing
Real Estate Investment Trust over the past three years, with an
annualised total return of 24.8% per year. 
Equites achieved an 11.7% growth in distribution, despite a
tough macroeconomic climate. This growth was underpinned
predominantly by: 
• a solid operational performance, including like-for-like
rental growth of 7.8%, 
• acquisitions and developments which contributed 2.3%,
at net initial yields that exceeded the underlying weighted
average cost of capital;
• a successful R800 million capital raise, lower financial
leverage and a decrease of the group’s cost of debt. 
 Equites CEO, Andrea Taverna-Turisan, commented that
“Its unrelenting pursuit of strong property fundamentals has
resulted in a tenant profile of almost 93% blue chip companies,
a long lease profile which further increased to 8.3 years  and
a strong contractual weighted average lease escalation profile
of 7.9%, which supported robust like-for-like income growth.
Continuous operational focus reduced vacancies across the
portfolio to 0.2% and administrative costs were maintained
at well-below sector averages.  The group has successfully
renewed 91% by GLA of industrial leases expiring in the year
to February 2018 and is pleased that this was achieved with
a positive average rental reversion of 4.3%. This represents a
retention rate of 83% by GLA. 
 The disruptive impact of e-commerce is creating profound
structural tailwinds to prolong the cyclical upturn despite
Brexit concerns and makes this market increasingly desirable.”
     Taverna-Turisan concluded: “The South African economy
is undoubtedly under severe strain, but the group continues
to see demand for modern logistics space. Our conservative
approach and focus on strong property fundamentals should
enable Equites to continue delivering sector beating returns,
despite economic constraints. “
Tradehold on track
after restructuring
In the six months to
end August Tradehold
repositioned itself as a
dedicated property business
after
unbundling
its
financial services and solar
energy business interests
to shareholders and listing
Friedrich Esterhuyse, CEO,
Tradehold
these separately on the JSE’s
AltX as Mettle Investments.
It has 40% of its net property interests in the United
Kingdom, 52% in South Africa and Namibia, and the
remaining 8% elsewhere in Southern Africa. Pound sterling
has been used as Tradehold’s reporting currency since its
establishment.
As a result of the restructuring, Tradehold’s financial
results for the six months are not directly comparable with
the corresponding period in 2017 which included those of the
financial services businesses.  
During the reporting period tangible net asset value
per share, which the board has accepted as the company’s
measure of performance, came to 119 pence (R22.73) as
against 127 pence (R21,33) in the corresponding period if the
unbundled financial services are excluded.  This represents a
very substantial discount to the company’s share price which
currently trades at about R12.50 a share.
Tradehold joint CEO Friedrich Esterhuyse said during
the reporting period, subsidiaries in both its main markets
had operated under the most challenging trading conditions. 
In the UK this was due mainly to Brexit uncertainty and the
rise in online shopping, while in South Africa the economy
has slipped into a recession with little promise of a sustained
recovery in the near future.
To strengthen this focus, Collins Group, the name under
which Tradehold operates locally, has started selling off certain
non-core assets in its portfolio of 150 properties, these being
37 smaller buildings.  At the end of August, the total value
of Collins portfolio, including the properties Tradehold owns
in Namibia, was £501m (R9,57bn) compared to £576m
(R9,4bn) as at 28 February 2018.  The Collins Group
contributed 63,8 pence (R12,18) to net asset value per share. 
SA Real Estate Investor Magazine NOVEMBER/DECEMBER 2018
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