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Oryx Properties aims to grow asset base

2022-09-06  Edgar Brandt

Oryx Properties aims to grow asset base

For the next three years, the strategy for Oryx Properties Limited aims to grow the company’s total asset base inorganically to N$4.5 billion. The strategy, which runs until 2025, was recently approved by the company’s board of directors. Oryx Properties Limited is a property loan stock company listed on the Namibian Stock Exchange and is almost entirely owned by Namibians. 

Oryx’s current portfolio, including investment property held for sale, was recently independently valued at N$2.9 billion (2021: N$2.8 billion) by Mills Fitchet Magnus Penny with a positive fair value adjustment of N$47 million (2021: negative N$94 million). 

In the short to medium-term, Oryx’s management stated it is focused on growing the fund geographically across Namibia while repositioning the portfolio to exit high risk sectors and reducing the concentration risk of Maerua Mall. According to an Oryx Properties statement, the positive fair value adjustment is mainly attributed to industrial and office segments, increasing by 2% and 4% respectively in value. 

“The industrial portfolio value increase was underpinned by positive rental growth and lease terms where solid tenancies are in place. The office portfolio value increase was mainly attributed to A-grade offerings, such as Maerua Mall, where rental levels increased with low vacancy outlook expectancy. The Channel Life building was classified as investment property held for sale during the year, given its probability to sell the asset in the next twelve months,” read an Oryx statement. 

Following the release of the company’s annual financial results published on 2 September 2022, its CEO, Ben Jooste, noted Oryx is “excited and confident” about its results and its vision for the future. 

“We wish to thank our management team, employees and service providers for their commitment and dedication during the year and we extend our gratitude to our tenants, financiers, board, and unit holders for their continued support,” said Jooste.  

The CEO explained that rental operating income declined by 1.4% from the previous year, which was mainly due to the impact that Covid-19 continued to have on the tenants operating in the retail and tourism industry, with negative rental reversions ending at 7.3% (2021: 9.14%) for the year. The core portfolio and residential vacancy factors improved to 5.4% (June 2021: 5.9%) and 1.9% (June 2021: 11.2%) respectively.

“Performance in the latter part of the financial year went particularly well and better than anticipated, which was the result of proactive initiatives to reduce tenant debtor balances, including restructuring significant tenancy lease terms. Covid-19-related rent concessions were suspended during the year and our average debtor’s collection improved to 96% (2021: 89%). The outcome was a reduction of other expenses, which includes receivable impairments, to N$34 million (2021: N$61 million),” said Jooste. 

The latest financial results further indicated that the Oryx Group’s distribution per linked unit for the year ended 30 June 2022 amounts to 101.75cpu (June 2021: 99.75cpu), being interest of N$89 million (June 2021: N$87 million). The interest distribution for the 2022 financial year was based on 75% of total distributable income, whereas the 2021 interim and final interest distributions were based on 90% and 75% respectively. On a 100% payout basis, distribution per linked unit increased from 120.44cpu in 2021 to 135.67cpu in 2022, which represents an increase of 12.6% from the prior year.

Meanwhile, Jooste advised that the Namibian economy was estimated to have recovered moderately during the 2021 calendar year, and was projected to improve during 2022 and 2023, which was supported by the growth in the mining and most tertiary industries. 

“Namibia’s domestic growth remains constrained by the aftereffects of the Covid-19 pandemic and high energy prices for fuel and gas coupled by supply disruptions globally. The rise in inflation and interest rates is expected to have an impact on our business. Initiatives such as the interest rate hedges taken out during the 2021 financial year reduce our exposure to rising interest rates,” Jooste stated.  

2022-09-06  Edgar Brandt

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