Johannesburg - Pangbourne Properties' [JSE:PAP] consolidation of its balance sheet and focus on its core operations resulted in impressive interim results, analysts said.
The company reported on Thursday a 10.55% increase in its interim distribution to 70.20c per linked unit.
Pangbourne spent the last year cleaning out its fund and consolidating its investments.
"These are impressive results," said Mohamed Kalla, a real estate analyst at Barnard Jacobs Mellet [JSE:BJM]. "One of the drivers of these results is the clean-up - they got rid of about 36 properties."
"This produces managerial focus," said Kalla.
The fund owns 42 industrial properties, but considerable resources have been directed at its nine retail properties that include the Thrupps Centre in Illovo and the NI Value Centre in Cape Town.
"Thrupps is not targeting the people who live near it," said Pangbourne's managing director Barry Stuhler. "We'll be refurbishing and redeveloping our existing properties."
According to Paul Duncan, an analyst at Catalyst property fund, management's main focus will be on its existing portfolio.
"The portfolio has a lot of fat on it," said Duncan.
The company's vacancy rate is currently 6.72%, compared to 6.68% on June 30 2009.
Stuhler expects 10% growth for the full year, but is wary of commercial properties in Sandton and Midrand.
"Although I'm very bullish on letting in 2010, Midrand scares me," said Stuhler.
According to Stuhler, the road works and consequent water and electricity problems make it an unattractive area for tenants.
Stuhler also said the huge number of developments in the Sandton area will have a negative effect on vacancies.
Pangbourne's gearing is currently sitting at 36.2%, down from last year's 41.3% after selling its remaining units in Capital Property Fund for R50m.
Panbourne paid out an interim interest distribution of 70.20 cents per linked unit.