Dipula Income Fund was listed on the JSE in 2011 to become one of the few significantly empowered players on the listed property funds sector. It came out of a merger between two BEE players Mergence Africa Property Fund and Dipula Property Fund. Its growth over the past two years has been partly propelled by mopping up retail developments in previously marginalised areas. Lately Dipula emerged as one of the players behind the soon to be launched Orange Farm Mall, a R400m retail development south of Johannesburg.
Dipula has been extremely busy with acquisitions since listing a portfolio values around R2bn two years ago. Financial results for the six months ended February show the portfolio has more than doubled over the past two years to about R4.3bn.
Dipula CEO Izak Petersen said “It is our strategic intent to grow the average value of our assets to R50 million within the next five years or so. In this time, we aim to build a R10 billion portfolio and will acquire diverse, portfolio enhancing assets to grow the quality and sustainability of income within Dipula’s property portfolio”.
In the six months ended February Dipula reported 44.1% growth in distributable earnings and the actual distribution grew by 5% and 7% for A and B units respectively.
“Since listing in August 2011, Dipula has closed deals that will, once all assets are transferred, more than double the size of the fund,” said Petersen.
“After the implementation of all acquisition deals, Dipula’s portfolio will comprise 183 retail, industrial and office properties valued at approximately R4.3 billion, consisting of nearly 645,000sqm of lettable area”.
Dipula highlighted the fact that its market capitalisation grew from approximately R1.5 billion at listing, to more R3 billion currently. Furthermore, Dipula B linked units were the best performer in the listed property sector for the 2012 calendar year, with total returns of 77.27% compared to the sector average of 35.8%.
Dipula said its vacancies improved from 10.4% to 9.8%. The most remarkable improvement in occupancy levels was in its industrial and office portfolios which saw vacancies decrease from 13.1% to 7% and from 14.8% to 12% respectively.
Petersen said Dipula is targeting assets across all commercial sectors on its growth path, valued from R20 million to R400 million. “Despite continuing sluggish economic conditions, Dipula should achieve full year per unit distribution growth of between 6.5% and 7.5%,” says Petersen. “Some acquired properties took longer than anticipated to transfer and, with slower than expected letting, impacted growth. The full benefits of these acquisitions and some latest lettings will come through in the 2014 financial year.”
Dipula said it intends to apply for the new South African REIT (Real Estate Investment Trust) structure after its financial year ends on 31 August 2013.