Tower Property Fund withdraws guidance as rent payments delayed
The group has enough cash on hand to get through Covid-19 slowdown
17 April 2020 - 13:48
UPDATED 17 April 2020 - 18:08
byKarl Gernetzky and Alistair Anderson
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Tower Property Fund, which owns properties in SA and Croatia, has withdrawn its guidance for its year to end May as it reports that some of its tenants are late with their rent.
The group had expected dividend for its full year to May 2020 to be slightly down from the 74.2c per share — or the R250.7m — it distributed in its year ended May 2019. The real estate investment trust (Reit) has battled to grow its dividend payouts in recent years. Its dividend per share fell 4.9% in the six months to November 2019 and by 9.5% in the comparable period to November 2018.
The group said on Friday that it has collected in excess of 56% of its April rent, while historically, by this time, it would have collected about 77% of rents due.
Given the uncertainty on the effect of the Covid-19 pandemic on Tower’s operations and financial position, the group “withdraws its earnings and distribution guidance”, it said.
Tower has formed a credit committee to assess rental concessions and payment deferrals. The committee has approved R1.4m in rent reductions for April and May, and a further R2.1m in rental deferments.
About R39m is due in rent in total for April, the group said.
Tower owns a portfolio of 43 properties in SA and Croatia valued at R5bn. The six properties in Croatia represent 32% of the fund’s total value.
Tower had hoped that its Cape Quarter mixed-use development in Cape Town would attract more tenants, boosting returns, while its Croatian subsidiary, TPF International, which is based in Mauritius and is 74% owned by Tower, made more acquisitions.
Tower is selling 56 apartments at Cape Quarter located in De Waterkant, a sub-district of Green Point in Cape Town.
However, the pandemic has sent SA and Croatia’s economies into lockdown, which has made it difficult to grow the fund. The Eastern European country went into a three-month lockdown in March.
“The situation is uncertain and rapidly evolving and we shall continue to monitor and update our stakeholders on the anticipated impacts on our business as circumstances change,” the company said.
In afternoon trade on Friday, Tower’s share price was up 2.56% to R2, having fallen 60.4% so far in 2020. Over the same period, the JSE property index has lost 42.11%.
Update: April 17 2020 This article has been updated throughout.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Tower Property Fund withdraws guidance as rent payments delayed
The group has enough cash on hand to get through Covid-19 slowdown
Tower Property Fund, which owns properties in SA and Croatia, has withdrawn its guidance for its year to end May as it reports that some of its tenants are late with their rent.
The group had expected dividend for its full year to May 2020 to be slightly down from the 74.2c per share — or the R250.7m — it distributed in its year ended May 2019. The real estate investment trust (Reit) has battled to grow its dividend payouts in recent years. Its dividend per share fell 4.9% in the six months to November 2019 and by 9.5% in the comparable period to November 2018.
The group said on Friday that it has collected in excess of 56% of its April rent, while historically, by this time, it would have collected about 77% of rents due.
Given the uncertainty on the effect of the Covid-19 pandemic on Tower’s operations and financial position, the group “withdraws its earnings and distribution guidance”, it said.
Tower has formed a credit committee to assess rental concessions and payment deferrals. The committee has approved R1.4m in rent reductions for April and May, and a further R2.1m in rental deferments.
About R39m is due in rent in total for April, the group said.
Tower owns a portfolio of 43 properties in SA and Croatia valued at R5bn. The six properties in Croatia represent 32% of the fund’s total value.
Tower had hoped that its Cape Quarter mixed-use development in Cape Town would attract more tenants, boosting returns, while its Croatian subsidiary, TPF International, which is based in Mauritius and is 74% owned by Tower, made more acquisitions.
Tower is selling 56 apartments at Cape Quarter located in De Waterkant, a sub-district of Green Point in Cape Town.
However, the pandemic has sent SA and Croatia’s economies into lockdown, which has made it difficult to grow the fund. The Eastern European country went into a three-month lockdown in March.
“The situation is uncertain and rapidly evolving and we shall continue to monitor and update our stakeholders on the anticipated impacts on our business as circumstances change,” the company said.
In afternoon trade on Friday, Tower’s share price was up 2.56% to R2, having fallen 60.4% so far in 2020. Over the same period, the JSE property index has lost 42.11%.
Update: April 17 2020
This article has been updated throughout.
gernetzkyk@businesslive.co.za
andersona@businesslive.co.za
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