Fountainhead Property Trust chairman Michael Kirchmann hailed last year as a "momentous year" for the trust, which gained a new majority shareholder and management structure and also put initiatives in place to position it for its next phase of growth.
Centurion Mall - part of Fountainhead's R11bn portfolio of properties . Image:
Mall GuideLast year saw the conclusion of a drawn-out tussle between Growthpoint Properties and Redefine Properties for Fountainhead's R11.1bn portfolio, which ultimately ended with Redefine acquiring the majority of Fountainhead's shares.
Kirchmann said in the trust's annual report, which was published on Tuesday (14 January) on the company's website, that the bidding war resulted in professional costs of R12m, which shaved 1% off Fountainhead's potential distribution growth.
"But under the circumstances these were fees well spent," Kirchmann said.
Fountainhead, whose portfolio includes a number of shopping centres such as Centurion Mall, Blue Route Mall and Benmore Gardens, in October reported a 2% drop in distributions to 50c per unit year-on-year for the 11 months to August. The 11-month reporting period was a result of Fountainhead changing its financial year-end from September to August.
The 2% slide in income payouts was in significant contrast to a more positive sector average.
Kirchmann said the overall macroeconomic environment worsened during the year, adding that it shows scant signs of improving in this year, presenting a challenging backdrop for the property market.
However, Fountainhead expected to realise savings of R5m this year from allocating property management responsibilities to Fountainhead Property Administration, which is wholly owned by the new parent company, Redefine.
Committed and planned improvements to the trust's portfolio were valued at more than R1bn and Kirchmann said while consumer spending could level off, these improvements would reap rewards because of their strategic location.
Source: Business Day via I-Net Bridge
