SA Retail earnings rise

Listed property fund group SA Retail (SRI) reported a 9.2% growth to 77.7 cents in distributable earnings for the year ended March.

But no distribution was declared.

Unitholders who accepted the offer from SA Corporate, which now owns 99.8% of SA Retail units, waived their entitlement to a distribution for the period October 1, 2006, to March 31, 2007.

The distribution will be paid to SA Corporate.

MD Peter Sparks said the successful offer by SA Corporate had seen significant value enhancement for SA Retail unitholders.

"The participation in a fund with a market capitalisation of more than R8 billion will bring additional benefits to SA retail unitholders."

He said KwaZulu-Natal properties contributed 107.1 million rand in net rental income over the 12 months to March, with 80.8 million rand and 23.6 million rand earned by Gauteng and Western Cape properties, respectively.

He said the vacancy factor of the portfolio at March 31 had improved to 2.26% from 2.3% in 2006 and the expense to income ratio was 29.8%, down from 32.1% in 2006.

"The fund's major acquisition over the 12 months, the 1.025 billion rand Sharemax portfolio of 10 shopping centres, is currently being managed by Old Mutual Investment Group Property Investments with a view to extrapolating value from the underlying portfolio."

The Sharemax portfolio was acquired from March 1 at a projected yield of close to 9%.

Other acquisitions included the 66.6 million rand Willow Way centre, Pretoria; Dube Village shopping centre, a 44.5 million rand investment in KwaMashu, Durban; the 88 million rand Hubyeni Shopping Centre at Elim, Limpopo; and the 90 million rand Philani Valley Mall under construction in Umlazi, Durban.

Developments in the portfolio included Umlazi Mega City, a 165 million rand venture with SA Corporate, Pine Walk Centre, Pinetown, in partnership with Vukile Property Fund, and the expansion of The Bluff Shopping centre, Durban, and of Highland Mews, Witbank. Properties worth 170 million rand were sold over the 12 months.

Sparks said an announcement regarding the compulsory acquisition of remaining SA Retail linked units would be made on Friday, May 11. The listing of SA Retail linked units on the JSE would be suspended from May 14, with termination of the listing anticipated for June 29.

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