Dipula delivers solid results despite constrained macro environment

November 20, 2019

Salient Features

  • Revenue increased by 17% from R1.14 billion to R1.34 billion
  • Net property income up 19% to R927.2 million
  • Vacancies reduced by 20% to 6%
  • Net tangible asset value increased by 3% to R10.11
  • Net property cost to income ratio down 8% to 17%
  • Gearing levels stable at 40%
  • Combined dividends of 192.96 cents per share
  • A-share dividend of 110.25 cents per share and B-share dividend of 82.71 cents per share
  • Improved credit rating to BBB+ long term(ZA) and A2(ZA) short term

Wednesday, 20 November 2019, Johannesburg – South-African focused JSE-listed diversified REIT, Dipula Income Fund, today announced solid results for the year ended 31 August 2019, despite a constrained macro-economic environment. Revenue and net property income was up 17% and 19% respectively mainly driven by a 20% reduction in vacancies and acquisitions from the prior year which have now been accounted for over a full 12-month period. Its portfolio increased to R8.9 billion (FY2018: R8.6 billion) on the back of positive revaluations.

“We have remained disciplined in the execution of our strategy of building a resilient portfolio that is able to withstand tough market conditions. We are pleased with these results which emanate from owning a diversified portfolio which we have prudently grown over a number of years and de-risked through employing a range of value-add strategies including leasing, conversions, extensions and redevelopments. The result of these strategies is a significant improvement of our occupancy level to an impressive 94%. Integral to our strategy is running an efficient business and we have been successful in this regard as evidenced in the reduction of our net property cost to income ratio by 8% to 17%.” Commented CEO Izak Petersen

The dividend per A-share increased by 4.2% year-on-year to 110.25 cents per share (2018: 105.81 cents) and is in accordance with the A-share dividend policy. The dividend per B-share reduced to 82.71 cents per share (2018: 99.68 cents) resulting in a combined dividend per share of 192.96 cents (2018: 205.48 cents).

At year-end the Group’s property portfolio consisted of 194 properties valued at R8.9 billion with a total gross lettable area (“GLA”) of 923 679m², compared to 203 properties with a GLA of 930 644m² valued at R8.6 billion in the prior year.

Dipula spent R78 million on yield enhancing redevelopments during the year which resulted in significant tenanting opportunities. More improvements are planned for 2020 and beyond in line with Dipula’s ongoing roll-out of refurbishments that increase the life cycle of its assets.

The Group maintained gearing at around R3.7 billion representing 40%. At year-end its blended interest rate was 9.29% of which 78% had been hedged. The Company obtained an improved credit rating from Global Credit Ratings from BBB (ZA) to BBB+ (ZA) long-term and from A3 (ZA) to A2 (ZA) short-term. During the year under review Dipula concluded debt facilities of R1.02 billion of which R80 million was in respect of new facilities.

The Company secured an impressive 187 new tenancies equating to 83 595m² of GLA, R422 million in lease value at an average escalation of 7.9% and a weighted average lease expiry period of approximately four years.

Group vacancies were at 6% with the sectoral vacancy breakdown as follows: Retail 8.4% (2018: 8.1%), Offices 7.8% (2018: 9.2%) and Industrial 2.3% (2018: 5.8%).

Petersen emphasized that “The vacancy factor is significantly below SAPOA’s rate of 3.6% for industrial (as at December 2018) and 11% for offices (as at September 2019).”  He further states that “Dipula’s tenant retention was 85% for the year with an aggregate rental increase of 1.1% being achieved in a market otherwise evidenced by negative rental reversions.” Petersen attributes this to Dipula’s assets not being over rented and that rentals are in fact at levels that leave room for growth.

“Despite expected ongoing economic headwinds, our portfolio is robust and continues to perform well. Our team has established a solid foundation for medium to long-term growth through our focus on leasing and cost control, differentiated by our tenant-centric approach, the outcome of which is evident in these results.” said Petersen. “We remain on the outlook for strategically sensible growth opportunities, including corporate action in South Africa.” Petersen concluded.

The Company is of the view that the dividend per share on the combined basis will increase by 2% for the year ending 31 August 2020 compared to the current year.




Dipula Income Fund
+27 (0) 11 325 2112
Izak Petersen – Chief Executive Officer
Ridwaan Asmal – Chief Financial Officer
Articulate Capital Partners p;
Morne Reinders +27 (0) 82 480 4541
Siobhan McCarthy +27 (0) 83 301 7010