Tower Property interim revenue rises‚ despite difficult trading environment

In the six months to end November 2014‚ Tower reported a 38% rise in revenue to R118m‚ while operating profit lifted 37% to R96m.

Tower owns a diversified portfolio of 32 commercial‚ industrial and retail properties valued at R2.2bn‚ located primarily in the Western Cape (49% by value) and Gauteng (45%).

The fund aims to add value through active property asset management and the cost-effective greening of properties in the portfolio.

It said its headline earnings for the period under review increased by 73% to R61m compared with the year-earlier period‚ while its net asset value per share rose 7% to R9.71.

Image source: Tower Property Fund

Portfolio vacancies were at 10% in January from 8.2% in July 2014. The company said this was a direct result of two large tenants in Clearview Motor Village absconding from their lease obligations.

"Legal action is currently being taken to recover the debt‚" it said.

Looking ahead‚ Tower said its management team was focused on reducing vacancies and encouraging renewals as tenants faced the effect of a tightening economy. It would also focus on the acquisition of strategic properties to ensure the sustainability of the fund and to enhance returns for investors.

"The fund's greening strategy will be crucial in this competitive environment to reduce occupancy costs to ensure the retention of tenants.

"The directors remain committed to meeting the distribution forecast of 86.6c for the 2015 financial year‚" Tower said.

Tower declared an interim distribution of 41.99c per share which was a 27% increase from the year-earlier period.