Dipula seeing new growth opportunities after A and B share consolidation

SOUTH Africa-focused diversified real estate investment trust (Reit), Dipula Income Fund, said its defensive retail portfolio performed well through challenging trading conditions and it paid out a B-share distribution of 61.97 cents per share for the six months to February 28.

“Following shareholders’approval to simplify the group’s capital structure, this is the last time the dividend will be paid to the existing formula.

“We expect the scheme to be implemented immediately after the dividend payment on June 7 this year,” chief executive Izak Petersen said.

He said the plan to have only one class of shares would open opportunities that had in the past been denied to the group due to its dual share structure.

Dipula will buy back and cancel all its issued A shares at a swop ratio of 2.4 B shares for every A share in issue.

The B share distribution, made on a 100 percent pay-out ratio, compared with the 42.22c payout in 2021. The A-share distribution was raised to 61.97c from 59.02c.

Petersen said in a telephone interview that the retail centres and the industrial portfolio had performed well in the six months.

He said vacancies had crept up in the retail portfolio, but this was mainly due to refurbishments being made to properties in Johannesburg, and some bank tenants that had reduced space, a process he believed was over.

He expected vacancies in the office portfolio to stabilise at some point.

He said businesses had not yet fully accounted for the cost of the pandemic on their businesses through losing the culture of their business from employees working from home.

Dipula’s portfolio of convenience retail centres recorded average turnover growth of 14 percent, periodon-period. Contractual rental income across the portfolio increased by 0.6 percent to R541 million.

Property related expenses showed an inflationary increase of 5.8 percent to R232m.

Net property income fell slightly to R441m from R457m. The balance sheet was healthy.

The group’s portfolio value remained stable at about R9 billion and comprised 186 properties versus 189 in 2021.

Ninety three new leases were concluded during the period.

The portfolio vacancy excluding residential increased to 9.3 percent (7.6 percent) driven mainly by the office sector as tenants downsized due to changing user needs and challenging economic conditions.