Arrowhead takes wait-and-see stance on Rebosis

Despite reporting a 15.3% drop in full year distributions, the share price of diversified real estate investment trust (Reit) Arrowhead Properties was up more than 5% on Wednesday.

This suggests the market had either priced in the poor perfor- mance or was buying into its line of “long-term shareholder value”.

SA-focused Arrowhead’s latest distribution for the year ending September 30 was badly affected by its investment in fellow Reit, Rebosis Property Fund.

It has a 16.4% stake in Rebosis’s “B” share.

Arrowhead had warned of the expected decline in a Sens update on November 13, following Rebosis reporting a 27.7% decline in distribution for its B share.

“For now, Arrowhead is taking a wait-and-see approach to Rebosis. There are a few options we are looking at, but we don’t want to make any rash decisions,” Arrowhead CEO Mark Kaplan told Moneyweb.

“We want to see what happens with Rebosis’s planned sale of office assets.

“We think it should exit New Frontier in the UK and focus on its retail portfolio locally,” he added.

Moneyweb reported earlier this month that Rebosis plans to dispose of more than R6 billion in office property assets by April next year, as it looks to effect a turnaround.

In releasing its latest results, Arrowhead announced a dividend of 33.67 cents per share for the six months ended September 2018 and a full year dividend of 74.10 cents per share.