Collins Property Group, previously known as Tradehold Limited, has announced its financial results for the six months ending August 2024. The company reported an impressive 28.6% increase in earnings per share, reaching 54 cents compared to 42 cents in FY2023. However, headline earnings per share experienced a decline of 7.9%, settling at 35 cents from the previous 38 cents.
In the latter half of the last fiscal year, the Group transitioned to a Real Estate Investment Trust (REIT) and is now listed within the JSE’s industrial sector, standing as one of only two entities in this category.
As of the report’s conclusion, Collins Property Group boasts total assets valued at R12.1 billion, a slight decrease from R12.2 billion in August 2023. The portfolio’s geographical distribution includes 83% in South Africa (denominated in Rands), 6% in Namibia (Namibian Dollars), 7% in Europe (Austria and The Netherlands, in Euros), and 4% elsewhere in Africa (US Dollars).
The Group’s holdings in South Africa encompass 120 assets, primarily in Gauteng, KwaZulu-Natal, and the Western Cape, aggregating approximately 1.5 million square meters of rentable space. Industrial properties and distribution centres form the portfolio’s core at 66%, with the remainder comprising convenience retail (28%) and office buildings (6%).
Notably, 79% of the rental income from the South African portfolio is secured through leases with national clients, resulting in a robust collection rate of 97.2%, down slightly from 98.3% in the previous period. The Group expects this collection rate to improve in the year’s second half as interest rates decline and inflation diminishes.
The overall vacancy rate for Collins Property Group decreased from 3.9% on February 29, 2024, to 3% by the end of the current reporting period. The weighted average lease expiry (WALE) now stands at 4.2 years.
In the Western Cape, the Group successfully divested 50% of a convenience retail centre, achieving a yield of 7.75%, and commenced construction of a 20,000-square-meter facility to be anchored by a Checkers Hyper.
Collins’ Namibian portfolio has shown substantial progress, with the completion of the sale of 6,000 square meters of previously vacant office space in Windhoek. The Group envisions concluding the sale of its remaining Namibian assets by early 2025.
Expansion plans in Europe remain a priority for the Group, which currently holds six properties in Austria and four in The Netherlands as part of a consortium.
During this reporting period, five assets were transferred, generating R110 million in cash. Four additional transfers are anticipated to conclude by fiscal year-end. Further, the Group is finalizing agreements to sell six additional properties, which are expected to release approximately R420 million. This capital is earmarked for strategic offshore investments.
The net asset value (NAV) per share has risen to R15 from R12.6 in August 2023. This increase is largely due to the reversal of deferred taxes on future capital gains amounting to R667 million, related to its REIT conversion, alongside total distributable income of R177.1 million.
The loan-to-value (LTV) ratio is currently at 50%, with an all-in-cost-to-income ratio of 20%. The Board has declared an interim dividend of 50 cents per share for this reporting period.