Shareholders in JSE-listed property group Fairvest Property Holdings will be pleased that the company has managed to grow its dividend by 10.03% for the six months ended December 31 2014 and management has committed to similar growth in the second half of the financial year.
The company which on Monday released interim results via Sens told shareholders: “Management is confident that distribution growth, at the upper end of the range of between 9% and 10% as previously communicated to the market, is still achievable for the 2015 financial year. This is due to the positive letting of vacant space during the latter half of the reporting period, which positions us well for strong further growth in the 2016 financial year.”
Fairvest trades on a price to earnings multiple of 14 times earnings and offers a distribution yield of 6.8%. Shareholders have done well over the last 12 months with the counter rising from R1.20 per share to R2 per share.
The net asset value of the business is R1.60 per share and the gearing of the portfolio remains low at 20.6%.
The company has been targeting niche properties in lower-LSM, non-metropolitan areas including the Northern Cape. In December Fairvest paid R95 million for the Sibilo property which was offering an attractive 9.9% yield, an average escalation of 7.4% and an average lease duration of three years and seven months.
The Sibilo acquisition followed shortly after Fairvest paid R59 million for the Bethal Cosmos Mall in Mpumalanga, where the yield was 9.6% and a 7% average escalation clause was built in.
Shares in Fairvest closed up 9.5% (19c) to trade at R2.19 per share in Monday trade. On the day 54000 shares traded hands.