For Immediate Release: Embargoed until 31 August 2017
ORYX PROPERTIES LIMITED
The distribution per linked unit for the six months ended 30 June 2017 is 89.00 cents per unit and comprises 79.75 cents interest distribution and 9.25 cents dividend bringing the total distribution for the year to 167 cents.
Total net rental income increased by 2.2%, comprising an increase in the net rental income of the core portfolio of 8% and a decline in net rental of the South African properties of 89% or N$12.3m. This highlights the strength of the core portfolio, even in a challenging economic environment. The Board took a strategic decision to sell two South African properties which posed unacceptably high renewal risks, and this is the major contributor to the slowdown in distribution growth.
At year end the property portfolio was valued at N$2,435bn (2016: N$2,326bn), representing a growth of 5.5% (2016: 8.4%) in the core portfolio. The growth is mostly attributable to capital expenditure of N$131m mainly relating to the completion of the new Virgin Active premises, the general upgrade of Maerua Mall and the new Family Entertainment Centre, which is still under construction. During the year a property to the value of N$19m (Bennet Street, Port Elizabeth) was sold, while two other properties valued at N$14m (Caravelle Street, Port Elizabeth) and N$56m (Stellenbosch) respectively, sale agreements with suspensive conditions in place at year end, of which the latter was successfully transferred during July 2017.
Construction of the Family Entertainment Centre includes a Glow in the Dark putt-putt area, a trampoline park, redemption gaming area and a world class play area for children. The project is well underway and we are planning the opening for early October. We are keen to see this project completed in order to offer our customers an exciting, family friendly destination which will enhance their shopping experience at Maerua Mall.
We expect the tough trading environment to continue for at least another 12 months, especially after Namibia’s credit rating was downgraded during August 2017. We are confident that the quality and location of our properties, as well as the positive relations which we maintain with our tenants, will see Oryx through this time of negative GDP growth predictions.
We still foresee pressure on distribution growth during 2018, especially since the process of selling off some high risk, high yielding assets in South Africa continues. In line with our investment strategy, Oryx has committed defensive capital expenditure to some of our major assets which will be completed during 2018. The full benefit will only start flowing through during the 2019 financial year, when we expect normalised growth to return to our distributions.
Details of the offshore investment Oryx has been working on will soon be communicated to the market and should then offer the unitholders of Oryx the sought-after exposure to foreign currency and diversification of the portfolio.
As communicated to the market, Ms. Debbie Smit has resigned as Chief Financial Officer effective 15 August 2017 and has been replaced by Ms. Lizette Smit. Ms. Debbie Smit remains available as a consultant to Oryx for the foreseeable future. The Board wishes to extend its gratitude for her valuable contribution to Oryx.
The Board would also wish to thank our loyal tenants, financiers and unitholders for their dedication and association with Oryx during trying economic conditions and reiterates Oryx’s goal of delivering reliable and growing income to our investors.
For the full announcement, please refer to the NSX SENS, JSE SENS or the Oryx website at www.oryxprop.com.
Chief Executive Officer
Oryx Properties Limited