Collins Property Group, in its first half year as a listed industrial REIT, reported R177 million of distributable income for the six months to August 31 and it raised the interim dividend to 50 cents a share from 40 cents as it continued to prepare for expansion into Europe.
This was on revenue of R629m as against R604m in 2023.
Collins managing director yesterday Kevin Searle said their continued ability to navigate through the uncertain conditions in the six month period was largely due to the composition of its portfolio of some 120 properties.
The share price increased by up to 14.1% to R11.50 in thin trade on the JSE yesterday afternoon.
“We have 66% of the portfolio invested in industrial properties and distribution centres, mostly covered by long dated leases with major national clients,” Searle said in a statement.
Group net assets were valued at R12.2 billion.
“Of our total rental income, 79% is generated by national clients, a major contributing factor to our ability to collect 97.2% of all income due,” Searle said. The vacancy rate was 3%.
Historically, the bulk of Collins’ portfolio has been located in Gauteng and KwaZulu-Natal, which the company is currently right-sizing by developing convenience shopping centres, a popular asset class, in the Western Cape.
Convenience retail now constitutes 28% of the value of the total Collins portfolio. The core of the portfolio (66%) consists of industrial properties, leased to national clients. The balance of the South African portfolio consists of office buildings (6%).
Searle said that, in addition to the Western Cape, they intended to expand into Western Europe, where it currently owns or part-owns properties in The Netherlands and Austria.
Six properties in Austria are owned while the group is part of consortia that own four properties in The Netherlands. All these properties were leased for the long term to major tenants and provided solid returns on investment, he said.
To raise the necessary capital for this expansion, non-core properties in the portfolio had been identified and offered for sale on an ongoing basis.
“Should all 15 properties in the present sales pipeline be transferred to new owners, these sales will generate around R530m cash for expansion overseas,” he said.
Looking to the second half, Searle said he was optimistic that the positive impact of the Government of National Unity and decreased load shedding, coupled with falling interest rates and inflation, would stimulate business confidence and a rebound of the property sector.
“Our focus will continue to be on growing distributable income in a sustainable and predictable manner,” he said.
BUSINESS REPORT