Dipula reports solid H1 financial results, expects FY dividend growth

Real estate investment trust (Reit) Dipula Income Fund achieved an 11.5% year-on-year increase in distributable earnings to R216.4-million for the six months to February 28.

The Reit on Monday stated that its A-share dividend increased by 4% year-on-year to 52.6c a share and its B-share dividend by 5.3% year-on-year to 44c a share.

At period-end, Dipula’s property portfolio of 174 properties, comprising retail, office and industrial properties across South Africa, was valued at R7.1-billion, with a gross leasable area (GLA) of 748 978 m2.

This compares with the 193 properties valued at R7-billion and comprising a 789 753 m2 GLA it owned in the first six months of the prior financial year.

In November, Dipula announced the acquisition of a portfolio of properties from Setso Holdco and Rec Group Property Trust for R1.25-billion, which will increase Dipula’s current portfolio value to R8.5-billion.

This portfolio has a GLA of 340 221 m2 and comprises two retail properties in Gauteng, six office properties across Gauteng and the Western Cape, and two redevelopment properties.

The transaction includes the acquisition of a 50.01% shareholding in a company that owns a portfolio of predominantly industrial properties located across KwaZulu-Natal, the Eastern Cape, Mpumalanga, Gauteng and the North West.

The properties are expected to transfer in June.

Dipula’s other acquisitions include a 50.1% interest in the Marikana Shoprite Centre for R50-million, effective from December, a 30% stake in sectional title offices at Rosebank Firestation for R122-million, effective from April, as well as a 50% stake in Harding Shopping Centre for R52-million, effective from March.

During the reporting period, Dipula disposed of two centres in Gauteng (274 Beyers Naude Drive and Wescen Corner) for R53-million. Post-period, Dipula disposed of its 30% stake in Eyethu Orange Farm for R147-million.

The Reit stated that the conversions of vacant office buildings in Midrand and Bruma, in Gauteng, to residential units are progressing well and are expected to be completed in the second half of 2018 and early 2019, respectively.

The Dipula board said its focus in the next six months will be on integrating the new acquisitions into the group and extracting maximum value from the existing portfolio.The board expects growth in dividends of between 4% and 5% for the year ending August 31.