CAPE TOWN - Fairvest Property Holdings is planning to increase its alternative electricity solutions after installing photovoltaic rooftop solar systems on 10 of its 44 peri-urban shopping centres for R36.6 million during the six months to end December.
Chief executive Darren Wilder yesterday said that the group had already started the expansion on seven more properties with a further R24.7m committed.
Wilder said the installations were meant to reduce Fairvest’s environmental footprint and increase the attractiveness of its shopping centres.
“They (the solar panels) are quite costly to put up, but they are also profitable, and pay for themselves,” Wilder said in a telephone interview yesterday.
Wilder said cost containment and efficient recoveries of municipal charges remained a strategic focus.
The gross cost to income ratio increased slightly from 36.7percent to 37.1percent in the interim period, although it was in line with strategy to maintain the ratio below 38percent.
The defensiveness of Fairvest’s portfolio proved itself again during the period after the group reported above market distribution growth of 5.1percent to 11.16cents per share.
Net property income rose 2.2percent, vacancy rates were at 5 year lows and arrears had remained consistently low at 1.7percent. Wilder said management was confident that distribution per share growth of between 4percent and 6percent was possible for 2020.
He said they kept to a strategy of keeping a simple traditional property business, with no off-balance sheet structuring. “We continue to seek quality assets with strong property fundamentals and to provide hands-on property management.”
Fairvest focuses on retail assets mainly in non-metropolitan and rural shopping centres, as well as convenience and community shopping centres servicing the lower income market in high growth nodes, close to commuter networks.
The portfolio consists of 261431m² of lettable area valued at R3.49billion and a split of 95.6percent retail and 4.4percent office properties.
Wilder said, however, there were no plans at this stage to acquire properties in the second half.
Total property revenue increased by 11.9percent to R267.7m.
The value of the portfolio increased 10.4percent to R3.49bn as at December 31.
The increase in property value was mainly as a result of the R162.9m Nonkqubela Mall acquisition, the Qumbu Plaza development to the value of R54.8m, capital expenditure of R45.3m and a 3.1percent increase in the historic portfolio.
Fairvest closed 2.86 percent up at R1.80 on the JSE yesterday.