Fairvest could deliver double-digit dividend growth in 2019
JSE-listed Fairvest, which owns shopping centres in smaller towns and rural areas, has delivered inflation-beating dividend growth every interim period for more than six years.
The group’s dividend grew 8.3% to 10.616c in the six months to December as it managed its way through a “bear property market”, CEO Darren Wilder says.
Fairvest was on course to deliver dividend growth of between 8% and 10% for the full financial year to June, according to Wilder. Fairvest was the fourth-best performing property stock in terms of total returns, including share price and dividend growth last year, giving investors 25.7% back.
Since joining at the end of 2012, Wilder and his team have turned around the fortunes of Fairvest, which had previously struggled with managerial changes. Wilder has re-positioned it as a lower living standards measure (LSM) retail landlord.
The Fairvest property portfolio consists of 45 properties, with 241,214m2 of lettable area and is valued at R3.14bn.
“We are a business that investors understand. Our goal is to deliver consistent income returns without having to use complicated and risky financial engineering techniques. We focus on SA and want to be seen as a reliable property investment fund,” he said.
The company’s net asset value increased 2.3% to 232.98c per share while vacancies were contained at 3.5% of total lettable area. Like-for-like annualised net property income increased 6.4%. Wilder said tenant retention was at 79.8% at the end of the reporting period.
Head of listed property funds at Stanlib Keillen Ndlovu said Fairvest’s results were impressive and that it had bought and managed its assets well, adding that the company’s properties are also defensive in a weak economic environment.
S aidNdlovu, “Fairvest is a simple and well-run fund that has been quietly delivering solid and consistent results from smaller retail centres targeting lower income markets.”