Resilient posts 6.2% rise in rentals with better power supply

Resilient Reit reported a 6.2% increase in average rentals for the six months to end-June thanks to Eskom’s improving power supply.

The retail-focused property group said the use of solar energy and an R11.1m reduction in diesel expenses also significantly improved net property income (NPI). 

Sales in SA rose 2.9% during the review period and by 4.7% on a rolling 12-month basis, despite the group facing tough economic conditions and the effect of construction at various shopping centres. 

The company also reported revenue growth of R122.7m on the previous matching period’s to R1.78bn while diluted headline earnings per share fell to 191.7c from 266.15c.

An interim dividend of 218c was declared, up 7.8%. Its loan-to-value rose from 36.1% to 37%.

Resilient invests in major retail centres with at least three anchor tenants and primarily leases to national retailers.

Despite continuing pressure on consumer discretionary spending, Resilient said its portfolio performed strongly thanks to the group continuing to adapt shopping centres to meet consumer needs. The portfolio, especially in Gauteng, the North West, and the Northern Cape, has gained from significant redevelopment efforts, the addition of grocery stores as anchor tenants, and the opening or expansion of Dis-Chem and Clicks stores, CEO Johann Kriek, said. 

During the interim period Resilient completed 369 lease renewals for 143,550m² of gross lettable area (GLA), with average rental rates 4.9% higher than those at the end of the previous leases. Additionally, 79 new tenants took up 16,800m² of GLA, with their rental rates averaging 36.3% more than those of the outgoing tenants. Escalations of 5.9% and 6.2% were recorded for renewed and new leases, respectively. 

Resilient owns 27 retail centres with a total GLA of 1.2-million square metres. Asset management efforts, especially at Boardwalk Inkwazi, Jubilee Mall, and Soshanguve Crossing, aimed at reducing the number of department stores and cinemas while boosting the presence of grocery anchors, led to a temporary rise in vacancies, which stood at 2.1% at the end of June.

majavun@businesslive.co.za