Delta Property Fund reports 10.34% increase in net operating income amid turnaround of strategy

DELTA Property Fund, a special-ist black-managed and substantially black-owned REIT with a significant sovereign underpin, is progressing well with turnaround: net operating income increased by 10.34% to R721.4 million for the year ended February 28.

- EDWARD WEST

Cash inflow from operations remained strong at R565.4 million, which was mainly used to repay finance costs of R446.4m, taxation of R27.2m, net capital expenditure of R44.6m, lease liability settlements of R3.9m, and net debt repayments of R92.9m.

"Our turnaround strategy continues to gain momentum, notwithstanding the macro-economic pressures. It is pleasing to see the impact of our disposal strategy, prudent debt manage-ment, rigorous cost control measures, lease renewals, and concerned efforts to reduce office vacancies," said CEO Bongi Masinga.

Group chief financial officer Fikile Mhlontlo noted that revenue remained relatively stable, tracking 2% down at R1.14 billion, mainly due to rental reversions and a single vacancy of 16 005 square metres from the third quarter of the year under review.

He said in an interview that new leases and disposals supported a reduction in the overall portfolio vacancy rate to 31.9% from 33.4%, but when the non-core portfolio was excluded, the vacancy rate fell to 18.4% from 24.2%.