Archives for March 2020

Balance sheet management in a time of crisis

Balance sheet management in a time of crisis


Johannesburg, South Africa – 20 March 2020: The coronavirus (COVID-19) has triggered unprecedented financial market conditions, which emphasises the importance of prudent balance sheet management and demands careful liquidity planning.


Redefine’s last reported (as at FY 31 August 2019) currency analysis of its assets and debt position is set out below:

Property assets Debt LTV Weighted average cost
(R’billion) (R’billion) (%) (%)
Net ZAR* 72.8 21.2 29.1 9.1
AUD 3.6 1.9 52.0 4.0
EUR 15.8 14.0 89.2 4.0
GBP 2.8 4.1# 145.5 3.0
USD 0.4 0.6# 141.0 4.5
Total 95.4 41.8 43.9 5.8


# Refinanced post 31 August 2019 to be in line with carrying values *Net of cash and cash deposits on CCIRS


Cross-currency interest rate swaps (CCIRS) are included at market value in the debt analysis above.


Redefine’s loan-to-value (LTV) ratio at 29 February 2020 is expected to be materially unchanged from the position at 31 August 2019.


The summary above demonstrates the natural net asset value hedge created by Redefine matching its asset and debt currency exposures. The summary is not however reflective of assets backing secured debt facilities. The analysis below illustrates the last reported assets encumbered to support the various secured loans

Assets Debt LTV
(R’billion) (R’billion) (%)
Local property assets 52.9 21.3 40.3
Offshore property assetsUD 7.0 3.3 47.1
Listed investments 2.9 2.7 93.1
Encumbered assets / secured debt 62.8 27.3 43.5
Unencumbered assets / unsecured debt
32.6 14.5 44.5%
Total 95.4 41.8 43.9%

The following is noted:

  1. 66% of Redefine’s property assets are encumbered, leaving unencumbered assets amounting to R32.6 billion to support unsecured debt of R14.5 billion;
  2. 78% of the secured debt is secured by local property assets, with a LTV ratio of 40.3%
  3. Offshore debt totaling R3.3 billion is secured against offshore property assets, which has no recourse to the South African balance sheet; and
  4. There is no capital margining required to top up or cure a shortfall in the market value versus secured debt in respect of listed investments (including in relation to Redefine’s investment in RDI REIT PLC, EPP N.V and Cromwell Property Group).

Redefine includes the market value of all its CCIRS in the debt balance to calculate its LTV in order to present a complete and prudent picture of its solvency and liquidity position. It must further be noted that none of Redefine’s CCIRS have any credit support arrangements in place, which means that no cash margining or other collateral is required if the Rand depreciates.

As at 31 August 2019, Redefine reported debt amounting to R6.3 billion maturing by 31 August 2020 (of which R1.6 billion was subsequent to 29 February 2020). Substantially all of this debt has been successfully refinanced and management is comfortable the balance will be addressed. We also have taken advantage of the lower interest rate curve to increase and extend our hedging maturity profile.

Although we are operating in a fluid environment, Redefine remains well within all its debt covenants, the most stringent of which being a maximum Group LTV level of 50% and an interest cover ratio of 2 times. Redefine continues to execute on its previously announced strategic priority to reduce balance sheet risk. Working capital management has also been prioritised. Redefine has a strong liquidity position which includes significant cash and access to R2.8 billion in committed undrawn credit facilities.

During this time the health, safety and wellbeing of all our stakeholders remains Redefine’s managements’ highest priority and a dedicated team has been established to ensure a co-ordinated response across the business. The team is tasked with developing and implementing the necessary responses and measures to address COVID-19. Management takes the threat seriously and is implementing practical measures to curb the spread of the virus for as long as the circumstances demand. A curtailment on discretionary costs has been implemented to make allowance for the anticipated costs associated with the various initiatives to combat the spread of COVID-19.

At the time of release of this communication, normal domestic trading has not yet been materially impacted by disaster management regulations and business continuity plans have been implemented to minimise disruption by initiatives implemented to curb the spread of COVID-19.

Despite the limitation of trade in Poland’s shopping centres the movement of freight around, in and out of Poland continues as usual and the manufacturing sector is not shut down. In fact, there is additional demand for logistics space to support the current contingency measures. The Government of Poland has announced the provision of a $51.5 billion rescue package designed to shield the economy from the impact of COVID-19 which includes payments of portion of salaries for businesses affected by trading restrictions and a temporary suspension of the Sunday trading ban.

Redefine is pleased to report that the introduction of an equity partner into its Polish logistics operations successfully closed on 10 March 2020. Management continues to make positive progresson the various initiatives to reduce the LTV ratio, whilst building capacity to absorb any negative LTV triggers arising from the current environment.

Redefine’s purpose-driven strategic approach remains highly appropriate for this environment and its diversified property asset platform is robust and well positioned to withstand prevailing market conditions.

Planned leadership transition at Texton

JSE-listed Texton Property Fund today announced that it is embarking on a planned leadership transition to tailor its executive composition to its new streamlined business structures and shifting operational needs.

The transition in leadership will see Texton’s caretaker CEO, Marius Muller, who has steered the company for the past 15 months, vacating the position at the end of June 2020. As from 1 July 2020 he will revert to his former position as a non-executive director of Texton and also resume his role as a member of the company’s Capital and Investment Committee.

Texton Chairman, Marcel Golding, says, “Marius stepped in to lead the business at an extremely challenging time for the company. Texton has been meaningfully repositioned and its strength as a sustainable long-term business is significantly improved. It has clear strategic direction and a strengthened foundation from which to move forward. We thank Marius for his ongoing leadership and commitment and look forward to his continued contribution on the Texton Board of Directors. The board has full confidence that this transition represents a seamless handover and strong continuity.”

Texton is a diversified REIT with total property assets valued at R4.2bn, of which 60.9% by value is in South Africa and 39.1% in the United Kingdom.

Under Muller’s leadership, key issues have been resolved. It has put a clear strategy in place focusing on tenant retention, filling vacancies and lowering funding risk. Good progress is already being made against its strategic priorities. Texton recently reported its interim results for the six months to 31 December 2019, showing improved operational metrics from its South African portfolio. In the UK, it declared solid figures from its wholly-owned UK portfolio. Its biggest asset, Broad Street Mall, is moving forward with value-adding residential and hotel expansion projects, among others, which will transform it into a mixed-use precinct and unlock value. Texton’s loan-to-value ratio had improved notably to below 45%, with strategies in place to bring it down further

Golding confirms that the process of finding a replacement CEO has already commenced and an update in this regard will be issued in due course. “Given the environment in which we are operating, our new executive structures have been tailored to elevate efficiencies while delivering the company’s strategic priorities and operational key performance areas. In this regard, we will be announcing the appointment of a senior property specialist as the Financial Director of Texton next week. We strongly believe these changes are good for Texton and its stakeholders,” says Golding.

Growthpoint reports a steady first half with its growth strategies paying dividends

Growthpoint Properties (JSE: GRT) reported distributable income growth of 2.2% to R3.2bn, an increase in dividends per share of 0.2%, and a 14.9% increase in group property assets to R160.2bn for its six-month period to 31 December 2019.

South Africa’s largest SA primary listed REIT delivered half-year results in line with market guidance, while boosting the diversification of its assets. Growthpoint invested R4.2bn internationally, and in SA it reported R1.5bn of investment with another R1.2bn of commitments.

Norbert Sasse, Group CEO of Growthpoint Properties, attributes the company’s increase in distributable income and asset value to its growth strategies, specifically internationalisation. Growthpoint now has 35.2% of its assets offshore, contributing 24.3% to its earnings before interest and tax (EBIT).

Sasse comments, “It’s been an exceptionally tough six months and we are pleased with the strategic progress achieved. However, the considerable gains from our internationalisation strategy were erased by the underperformance from our domestic property portfolio as a result of SA’s economic decline, with the V&A Waterfront being an exception. Even so, Growthpoint’s growing international footprint continues to ensure that it is defensive.”

Growthpoint creates value through innovative and sustainable property solutions that provide space to thrive. It is the most liquid and tradable way to own commercial property in SA, and has a 16-year uninterrupted track record of dividend growth. Currently the 31st largest company in the FTSE/JSE Top 40 Index, Growthpoint is a constituent of the FTSE EPRA/NAREIT Emerging Index. It has also been included in the FTSE4Good Emerging Index for the third successive year and in the FTSE/JSE Responsible Investment Index for its tenth year.

High-quality property assets underpin Growthpoint’s quality earnings. Growthpoint owns and manages a diversified portfolio of 563 property assets including 441 properties across SA valued at R79.2bn and a 50% interest in the properties at The V&A Waterfront, Cape Town, valued at R9.7bn. Growthpoint owns 58 properties in Australia valued at R42.5bn through a 62.2% holding in ASX-listed Growthpoint Properties Australia (GOZ). Through its 29.4% investment in LSE AIM-listed, Globalworth Investment Holdings (GWI) it owns an interest in 61 properties in Romania and Poland, 100% of which is valued at EUR3bn,

During the half-year, Growthpoint expanded its international footprint with a 51.1% investment in Capital & Regional. The UK REIT, which is listed on the LSE with a secondary listing on the JSE, owns a portfolio of seven needs-based community shopping centres, which are dominant within their catchment areas and have a value of GBP727m. Growthpoint’s investment in Capital & Regional is valued at R2.5bn.

“Our Capital & Regional investment is in line with our internationalisation strategy. It responds to opportunities created by the current market dislocation in the UK, which has proven to be a healthy investment market over the long-term. Capital & Regional is a defensive, stable and scalable platform to further our internationalisation in the UK, and we will support its growth. It is dealing with the structural changes to retail in its market, pressure on property valuations and rental income and has significant capital expenditure requirements. Still, we see opportunities to realise value with alternative uses,” says Sasse.

Although its investment in Capital and Regional was finalised in the last week of 2019, it made a positive 2.7% contribution to Growthpoint’s distributable income growth. Growthpoint’s established international investments in GWI and GOZ also performed well.

The investment in Central and Eastern Europe through GWI contributed 2.9% of Growthpoint’s distributable income growth. GWI raised EUR264.3 of capital and continues to be well placed for acquisitive growth. Growthpoint invested R1.3bn in GWI to maintain its shareholding at 29.4%. Significant shareholder changes saw CPI Property Group and Aroundtown taking substantial stakes in the business. GWI grew its portfolio to 61 office and industrial assets, 38 properties in Poland and 23 in Romania and has an approved pipeline of acquisitions and developments to further its growth. Growthpoint’s R8.8bn investment in GWI has a market value of R9.6bn.

“Poland and Romania both offer strong macroeconomic environments and robust property fundamentals for GWI. Its markets are experiencing keen demand from multinational tenants, and there are accretive development opportunities and acquisition opportunities,” Sasse notes.

GOZ made a 0.8% contribution to Growthpoint’s distributable income growth. GOZ successfully raised AUD173.6m in equity during the period and is attracting keen interest from the broader Australian investment market. It reduced its gearing to 31.4% and significantly reduced debt costs. GOZ now has 58 property assets in Australia’s favoured office and industrial sectors, concentrated in the growth markets along the country’s Eastern Seaboard. It reported a 5% increase in the value of its portfolio and signed its longest lease agreement to date with the NSW Police Force for 25 years. Growthpoint’s stake in GOZ has a market value of R19.6bn, against a cost of R9.6bn.

“With strong property fundamentals for its portfolio, and a development pipeline that is expected to deliver above-market returns, GOZ is guiding 3.5% growth in distributions to 23.8 AUD cents per share for FY20. It is also exploring ways to diversify its income streams,” points out Sasse.

Another new revenue stream for Growthpoint, its funds management, gained strong momentum during the period, and now has assets under management of around R10bn.

A busy six months for Growthpoint Investec African Properties (GIAP) saw it invest all the equity of the fund in acquiring Achimota Retail Centre, Manda Hill Shopping Centre and six properties in the RMB Westport portfolio to become a leading pan African property investment fund. Its quality portfolio of income-producing assets is focused in Ghana, Zambia and Nigeria. GIAP now has a combined portfolio value of USD510m and net asset value (NAV) of USD252m. It raised a further USD40m equity and a USD50 million bridge to equity loan, and Growthpoint increased its investment in the fund by R590.5m, taking its total investment to USD50m. Continuing its momentum, a new equity raise is planned to grow and diversify the fund.

Growthpoint Healthcare Property Holdings (GHPH) reported a strong six

months, growing its dividend per share by 7.5%, which totalled R69m for

Growthpoint as well as fund management income of R18m for the period. Having raised R685m of third-party funding, Growthpoint held 72.9% of the fund at 31 December. After raising another R288m in 2020, this diluted to 62%. The healthcare property fund will be boosted by the Pretoria Head and Neck Hospital development completion in August 2020, and a significant pipeline of acquisitions and developments will drive its growth.

With SA’s economy declining, Growthpoint’s domestic portfolio, which carries the Group overhead, decreased distributable income, contributing -2.9% to its distributable income growth. While Growthpoint’s NAV increased by R640m, its NAV per share decreased by -0.9% with several components playing a part in this. Overall, a 0.9% decrease in SA property values offset the positive effect of good growth from international investments. The directors’ R730.7m valuation write-down of the portfolio value takes a realistic view of SA’s economic erosion and its impact on the property market.

Almost all SA portfolio metrics weakened during the six months, with vacancies increasing from 6.8% to 7.4%. While it let more than 560,000sqm of space, the renewal of leases expiring during the period was down to 67.6% from 70.1% at FY19, and its renewal growth rates moved deeper into negative territory, from – 5.3% to -5.6%. Arrears and bad debts increased notably, but remain well contained.

Placing strategic emphasis on optimising its SA portfolio, the period saw Growthpoint investing R1.1bn in developments and R282.1m of capital improvements, investing in core assets with upgrades and enhancements. It disposed of R433.8m of non-core properties and made two strategic acquisitions of R134.3m. Growthpoint’s capped third-party trading and development strategy, earned fees of R7.7m, amounting to a -1.7% contribution to distributable income growth, with a solid pipeline of transactions that are expected to be completed in the second half of FY20.

“The SA economy has stalled, and that makes for a remarkably difficult operating environment. There’s an absence of catalysts to re-start the economic engine and drive business and consumer confidence upwards. Property fundamentals are likely to deteriorate further, worsened by Eskom uncertainty and increased cost pressure on utilities and rates and taxes. We expect the SA property portfolio to continue to dilute growth,” reports Sasse.

Across the country, properties in KwaZulu-Natal and the Western Cape, particularly at the V&A Waterfront, are performing relatively better than in other areas. Net property income at the V&A Waterfront grew with the completion of developments, including the Woolworths extension, which saw the retailer double in size to 9,000sqm. With Cape Town’s water crisis abating, tourists flocked back to the V&A Waterfront, with upside for its hotel occupancies and cruise passenger numbers. Retail sales grew 3.5%, even in the challenging economy, with positive trading density growth of 6.1%. The V&A’s 99% portfolio occupancy reflects strong demand for P-grade offices and flagship retail space. A new flagship Apple Store opens at the precinct this month, and its 9,000sqm regional head office development for Deloitte is progressing well. The V&A Waterfront contributed 0.7% to Growthpoint’s growth in distributable income.

“At the V&A Waterfront, we continue to look for opportunities to enhance earnings, increase bulk and densify the precinct. The development focus is on the Canal District and prioritising the Pierhead District, and our next area of focus is the Granger Bay development masterplan, which is being conceptualised,” says Sasse.

Growthpoint kept its Moody’s national scale rating of As a principally SA operation, its global scale rating is limited by the sovereign credit rating of Baa3, and the outlook was downgraded on the back of SA’s negative outlook. The company’s balance sheet is well capitalised, and its gearing is conservative. Its consolidated loan-to-value ratio stayed well within covenants, while edging up slightly during the six months from 36.4% to 38.2% for the group.

Growthpoint is SA’s second-largest listed corporate issuer, and its public bond issues totalled R1bn for three to seven years at spreads of Jibar plus 125 to 162 basis points. Some 57.8% of debt is unsecured, 82.3% of interest rate exposure is fixed, and the average term of debt is 3.8 years.

“Growthpoint has the advantages of a strong balance sheet, diversification across geographies and sectors, sustainable quality of earnings and ongoing commitment to best-practice corporate governance. Our growth strategies are the biggest drivers of distributable earnings growth, and they will continue to be our focus. We will support and grow our international investments and optimise our SA portfolio while seeking new opportunities and growing our new revenue streams,” concludes Sasse.

Growthpoint reaffirmed that its distribution per share growth for FY20, if any, is expected to be nominal.

Texton reduces debt while delivering solid half-year operational performance

JSE-listed REIT Texton Property Fund announced its results for the half-year ended 31 December 2019 and expects distributable earnings to be in line with guidance for the full year. Texton significantly reduced its loan-to-value (LTV) ratio by 2.3% or R340.8m, taking it from 47.2% to 44.9%, during the period.

“Texton’s strategic focus is constant and clear: it is committed to the fundamentals of retaining tenants and improving occupancies at properties while reducing debt and financing risk, and decreasing gearing,” says CEO Marius Muller.

Texton is a diversified REIT with total property assets valued at R4.2bn, of which 60.9% by value is in South Africa and 39.1% in the United Kingdom. The tough macroeconomics in both its markets during the period, and weakened property fundamentals, led to a challenging first half of the financial year. It reported an 11% decrease in distributable earnings.

Despite the headwinds, Texton made pleasing operational advances, including reducing its overall vacancy level from 10.5% in the prior interim period to 9.0%. During the half-year it increased its tenant retention rate from 86.2% to 90.5% and achieved positive rental reversions of 2%.

Vacancies in the South African portfolio decreased from 10.8% to 10.3% during the period. Of the vacant space, assets held for sale account for 39%. The remainder is mostly in Texton’s Gauteng office portfolio which, with vacancies of 9.3%, is outperforming the 12.5% SAPOA vacancy rate for Gauteng offices. New leasing deals finalised in the period extended the average unexpired lease term in the SA portfolio from 2.1 to 2.6 years.

The net property cost-to-income ratio of Texton’s South African portfolio decreased slightly from 26.4%% to 25.7%%. A thorough review of the soft-services for the portfolio achieved cost savings, which partially offset above-inflation increases specifically in rates and taxes and municipal charges.

Texton’s refinancing programme is its key priority and is being driven by a programme of non-core asset disposals, with some R326.8m of assets held for sale. Its non-core assets disposal programme resulted in the sale of Tesco Chobe in Newcastle in the UK during the period, where the proceeds were used to settle GBP11.3m of UK debt, significantly reducing financing risk. Texton has since been approved for a new five-year secured facility of GBP31.3m, which is a testament to the quality of its portfolio. The sale of UK assets was the main contributor to the 7% reduction in total portfolio revenue, which was partially offset by lower finance costs from reduced debt levels as well as favourable exchange gains.

The period also saw good progress repositioning Texton’s UK portfolio to increase the longevity of assets and sustainability of income. Texton’s wholly-owned UK portfolio is 100% let with an average unexpired lease term of 8.4 years. Leasing deals concluded in the period enhanced this figure.

Texton’s biggest asset, Broad Street Mall in Reading in the UK, in which it has a 50% stake, is a key focus. International brand Taco Bell was introduced on a new 10-year lease and is trading exceptionally well. Broad Street Mall has also concluded several other leasing deals, which has significantly reduced vacancy from 19% to 8%. Footfall at the mall grew 7.9% on a rolling 12-month basis for the period ending February 2020. In January 2020 alone, it increased a phenomenal 27%.

Texton is transforming Broad Street Mall from a pure retail mall to a mixed-use precinct with a hotel, entertainment, offices, residential and retail. It has already obtained consent to develop a 101-bedroom hotel at Broad Street Mall for Premier Inn, with which it has signed a 25-year lease, and is in the advanced stages of finalising a deal to sell the hotel on completion. The council has also approved the 422-flat residential development. Texton’s refinancing of the Broad Street Mall debt, in May 2020, will be a crucial focus in the second half of the financial year.

Muller notes, “Our investment in Broad Street Mall is well placed to benefit from significant value unlock in future. However, we remain realistic about the immediate challenges that both the SA and UK property sectors face right now.”

With a six-month dividend of 16.09 cents a share being declared, the pay-out amounts to 50% of distributable income, with Texton retaining R60m to decrease debt to more sustainable levels and strengthen the balance sheet in line with its capital allocation strategy. Texton’s Board of Directors has committed maintaining Texton’s distributable income guidance for the full year and meeting its REIT dividend commitments.

Fairvest maintains above-inflation growth in challenging market

Highlights for the six months to 31 December 2019

  • Distribution for the period increased by 5.1%to 11.155 cents per share
  • Total property portfolio increased by 10.4% to R3.49 billion
  • Net asset value up by 2.0% to 233.97 cents per share
  • Vacancies reduced to 3.2% of total lettable area
  • Arrears continue to remain low at 1.7% of revenue
  • Conservative balance sheet with LTV of 34.0%
  • 21.9 million treasury shares acquired at R1.86 per share Distribution growth of 4% to 6% expected for the 2020 financial year

Cape Town, 2 March 2020. Fairvest Property Holdings Limited (“Fairvest”) today again announced solid results for the six months to December 2019, with above market distribution growth of 5.1%, net property income growth of 2.2%, 5-year lows in vacancy rates and consistently low arrears. Chief Executive Officer, Darren Wilder said: “Fairvest’s focus on a differentiated sector of the market and its persistent drive to get the property basics right have again demonstrated the defensiveness of its portfolio amid market conditions that have proven extremely challenging.

Fairvest maintains a unique focus on retail assets weighted predominantly 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 44 properties, with 261 431m² of lettable area valued at R3.49 billion and a sectoral split of 95.6% retail and 4.4% office properties.

Wilder said that Fairvest is fortunate to have a team of hands-on property professionals who have deep experience in both bull and bear markets. In tough times, this experience is brought to bear to continue to achieve healthy results and sustained value creation.

Fairvest’s investment philosophy is to differentiate the fund through performance not size, with acquisitions considered in its property niche exclusively and only at the right price, with a strong focus on value extraction.

Healthy distribution growth

Total property revenue increased by 11.9% to R267.7 million, due to income growth in the historic portfolio, as well as an acquisition and a completed development during the period. A strong focus on arrears management reduced arrears to 1.7%, on par with the lowest level achieved in the past seven years. Cost containment and efficient recoveries of municipal charges remains a strategic focus, with the gross cost to income ratio increasing slightly from 36.7% to 37.1%, which is in line with the company’s strategic objective of maintain a cost to income ratio of below 38%.

Continued portfolio growth

The value of the property portfolio increased by 10.4% from R3.16 billion at year-end, to R3.49 billion at 31 December 2019. This increase is mainly as a result of the Nonkqubela Mall acquisition to the value of R162.9 million, the Qumbu Plaza development to the value of R54.8 million, capital expenditure incurred of R45.3 million and a 3.1% increase in the historic portfolio

The success of our asset management initiatives is best indicated by the improved asset quality ratios, with average value per property increasing to R79.3 million and average value per square metre increasing to R13 350.

Robust property fundamentals

The portfolio remains strongly diversified with a broad, geographically dispersed representation and the top ten tenants occupying only 52% of the portfolio. The low risk investment profile is further augmented by A- and B-grade tenants who occupy 80% of gross lettable area.

The weighted average contractual escalation for the portfolio decreased from 7.4% to 7.2% in the period. Gross rentals across the portfolio trended upwards, with in the weighted average retail rental increasing to R126.10/m². Vacancies were maintained at the lowest level achieved in the past five years. There is a strong focus on tenant retention and Fairvest successfully renewed 11 774 m² of leases, with an average escalation of 0.8%. The weighted average lease term increased from 35 to 38 months, which further negates the risk to its income stream. Letting of vacant space remained a focus area and during the period vacancies were reduced from 4.0% to 3.2%.

The company completed the installation of photovoltaic rooftop solar systems on ten of its properties at a cost during the period of R36.6 million. Solar installations on seven more properties commenced with a further R24.7 million committed. These installations will reduce Fairvest’s environmental footprint and further increase the attractiveness of its shopping centres for tenants.

Disciplined, conservative financial management

Fairvest’s loan to value remains conservative at 34.0%, in line with the board approved strategy. Of the debt, 67.1% was fixed through interest rate swaps as at 31 December 2019, with a weighted average expiry for the fixed debt of 42 months. The weighted average all-in cost of funding decreased to 8.92%. The weighted average maturity of debt was 22 months.

During the period the company repurchased 21 918 276 ordinary shares, or 2.2% of the issued share capital, in the open market at an average price of R1.86 per share, which represents a yield in excess of 12%. The shares are held in treasury in a wholly owned subsidiary.


Fairvest said that while economic conditions are expected to remain challenging; the company is confident that the nature of its portfolio, its low-risk tenant base and letting expertise will continue to be defensive in the face of current economic challenges. The company continues to target growth in distributions per share at the top end of the market, approximating or exceeding current inflation. Management remains confident that growth in distribution per share of between 4% and 6% for the full 2020 financial year is achievable, against the market expectation for the listed property sector which is to deliver negative to flat distribution growth.

Wilder said that Fairvest’s philosophy has always been to maintain a simple property business with an income statement and balance sheet devoid of complex financial structuring. This approach has resonated with investors, allowing the company to deliver a 5-year cumulative total return of 94.03%, relative to a SAPY return of 6.18% over the same period. “We are determined to continue to keep a simple traditional property business with no off-balance sheet structuring. We continue to seek out quality assets with strong property fundamentals and to provide hands-on property management, as we strive to continue to add value for our shareholders.”