"The volatility in the property sector and movements in share prices continued to be quite extreme, which made long-term planning more challenging," Rapp said, adding that the market would settle and more opportunities would return once fixed property prices were revised.
The performance of listed property stocks, including Vukile, has been at the mercy of bond yields, which have weakened since May although remaining highly volatile. Listed property and bonds are closely correlated as they are both income-generating investments.
Meanwhile, a number of listed funds have reported that some acquisition opportunities have been abandoned due to exorbitant fixed-property prices. However, price weakness in the listed sector is expected to filter down to the direct property market in coming months, thus making property prices more reasonable.
Rapp said Vukile would continue to pursue earnings-enhancing opportunities, including better internal efficiencies and acquisitions.
The focus would be on bedding down the fund's Encha Properties deal, which involved the acquisition of government-tenanted buildings from Encha and a strengthening of Vukile's black economic empowerment credentials.
The Encha deal, as well as Vukile's acquisition of 20 properties for R1.5bn from Sanlam and the purchase of a 50% stake in the East Rand Mall for R1.1bn, were the fund's three major deals which helped push its asset base from about R5.3bn two years ago to about R10bn.
After the Encha deal, Vukile's portfolio is about 53% retail-focused, while 10% of the portfolio is let to national government departments, 3% to a hospitals, 11% is industrial properties while the balance of its portfolio is in office space.
Rapp said the redevelopment of Randburg Square, at a cost of more than R200m, had been a very positive project for the fund. This project was nearing completion and would introduce about 20 new shops to the square. He said initial indications show footfall up more than 20%.
Rapp said Vukile's portfolio was in a better position than two years ago, largely thanks to purchases and sales but Vukile was still looking for opportunities.
Source: Business Day via I-Net Bridge
For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.
We pride ourselves on our wide variety of in-house skills, encompassing multiple platforms and applications. These skills enable us to not only function as a first class facility, but also design, implement and support all our client needs at a level that confirms I-Net Bridge a leader in its field.
Go to: http://www.inet.co.za
