Stenprop confident about dividend as it reports Covid-19 multi-let assets boost
Rent collection was strong and occupancy levels rose in estates catering to multiple tenants, Stenprop said
Landlord Stenprop, which is selling off assets in mainland Europe as it fully commits to UK multi-let industrial (MLI) estates, says this strategy has paid off amid Covid-19, with rent from these assets rising almost a fifth in its half year to end-September.
MLI assets refer to estates with multiple tenants, with Stenprop betting on these even as the UK property market experiences severe pressure from Brexit uncertainty, and now the Covid-19 pandemic.
The group, however, collected 90% of its rent in the six months to end-September, while it saw a 2.2 percentage point increase in its MLI occupancy rate to 93.3%. The pandemic boosted e-commerce and demand for regional distribution, Stenprop said, maintaining that this is ideally suited to MLI estates.
Stenprop kept its interim dividend per share unchanged at 3.375p — a £10m (R204m) payment — flagging the same amount per share for a final dividend, as it expressed confidence its cash position as it continues with asset disposals.
This resulted in the group being confident enough to give forward guidance on a final dividend for the first time, CEO Paul Arenson said in a statement, with the ability of Stenprop to advertise through its web-based portals and enter leases online being key factors in its first-half performance.
Net rental income from the MLI portfolio rose 17.1% to £9.6m to end-September, almost two thirds of the group’s revenue, while also adding to an increase in the underlying value of its portfolio.
Net rental income fell to £15.0m, from £15.8m previously.
The group had a £574.1m portfolio at the end of September, a 4.4% increase in its like-for-like value, while it completed £40m worth of acquisitions during its half year.
Up to the end of September 2020, MLI represented 62.8% of the property portfolio, an increase from 52% a year earlier. The group wants a 100% MLI portfolio by March 2022.
“The MLI sector has displayed its strength over the past six months and we have seen a material increase in demand from a new and ever diversifying occupier base,” the group said.
In afternoon trade on Friday, Stenprop’s share was unchanged at R27.30, having risen 12.35% so far in 2020, giving it a market capitalisation of R7.7bn.
Over the same period, the JSE’s property index has fallen more than 43%.
Update: December 4 2020
This article has been updated with additional information.
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