| | Vukile Propery Fund Limited
Location: Constantia Kloof, Johannesburg, Gauteng
Property Type: Property Fund
ZAR Price on Application
Contact: SA Investment +27(0)21 790 9900 |
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Vukile is a property fund which was listed on the JSE Limited on 24 June 2004 (JSE code: VKE). Its listing was promoted by Sanlam, which contributed a significant share of Vukile’s start-up portfolio and at present still holds a 27.5% interest in the company.
Vukile’s market capitalisation was approximately R3.2 billion at 31 March 2007 and it had a property portfolio which was valued at R3.86 billion. It has completed the acquisition of 100% of the issued share capital of MICC Property Income Fund Limited. There are 295 550 877 Vukile units in issue.
PROPERTY PORTFOLIO
To enable the Vukile team to focus on the strategic management of the company and the portfolio, many of the company’s operational functions are outsourced: the property asset management to Sanlam Properties; and the daily property management to Gensec Property Services, JHI Real Estate, Kuper Legh Property Management, Marriott Properties and CPS Property Management. The expertise and efficiency of these business partners are essential to Vukile’s success.
The group property portfolio as at 31 March 2007 consisted of 71 properties with a gross lettable area of
898 351m2.
Most of the vacancy at 31 March 2007 was in the retail component in Randburg Square (3 050m2), Hillfox (3 764m2) and in Durban Embassy (7 100m2). The marketing campaign that was launched at Randburg Square has resulted in the letting of 7 464m2 (71.2%) of the office space from August 2006, with the current office vacancy at 10.1%. In addition, 4 613m2 (11.3%) of the retail vacancy at Randburg Square was let during the year with a retail vacancy of 3 050m2 (7.4%) at year end. Furthermore, 6 065m2 (85%) of the vacant space at Durban Embassy has been let to Wesbank from 1 May 2007. The overall vacancy in the portfolio (expressed as a percentage of gross rentals) at year end was 2.9% (2006: 4.4%).
The lease expiry profile of the group indicates that approximately 46% of the industrial leases expire during the coming year, with approximately 21.6% the following year. This is typical of industrial leases. The expiry percentages for the commercial and retail sectors for the year ending March 2008 are 45% and 22% respectively and indicate no major risk areas. In fact, these expiry profiles provide an opportunity for the group to take advantage of the upward pressure on rentals.
New leases and renewals of 234 392m2, with a contract value of R458.7 million, were concluded during the year. The bulk of our leases are with government, large national and listed tenants and major franchises (approximately 46% of GLA). This gives stability to and lowers the risk of the portfolio.
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