Collins Property Group has in the year to end February doubled its profit from continuing operations from R516.9m in 2023 to R1,21bn.
The company, which was converted to a REIT during the course of the year, declared a final dividend of 50c per ordinary share. This brings the total distribution for the year to 90c per ordinary share, an increase of 50% over 2023’s 60c.
Collins Property Group came into being after the extensive restructuring of what was previously Tradehold Limited, and is in its present form one of two industrial REITs listed on the JSE. The restructuring and subsequent conversion has resulted in a greatly simplified group structure with a strategic focus on growing sustainable and predictable distributable income.
Commenting on the results, Collins CEO Friedrich Esterhuyse said although finance costs increased by R70m as a result of higher interest rates, revenue increased by 6.3% to R1 231m in a demanding business environment. Tax accruals on future capital gains of R677m were written back subsequent to the REIT conversion.
Esterhuyse said the results achieved were largely due to the defensive nature of Collins’s South African property portfolio of some 1.4m square metres. Of this, 81% consists of large warehouses and distribution centres leased to major national clients on a long-term basis.
“Due to this client base, which represents 86% of total rental income, we were able to collect 98.3% of all income due. The vacancy rate of 3.9% is well below the industry average, while the weighted average lease expiry date remained above four years.”
Convenience retail properties, which constitute some 13% of the South African portfolio, also continued to perform well. New developments during the year were mainly in this sector and coincided with management’s decision to prioritise growth in the Western Cape.
Another priority was growing Collins’s overseas portfolio. Esterhuyse said during the year Collins acquired, as a member of a consortium, four properties in The Netherlands at an average yield of 8.9%. “The six properties we owe in Austria also continued to provide a secure income.”
Esterhuyse said a senior member of staff had been relocated to The Netherlands during the year to grow the group’s portfolio in Europe. “To fund this growth, we are continuing to sell non-core assets. Of these eight were sold during the year while another eight are in various stages of transfer to their new owners.”
