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Johannesburg - Sycom Property Fund [JSE:SYC] said on Wednesday that its distributions for the six months ended September 2010 amounted to 77.18 cents from 77.14c a year ago.
Headline earnings per linked unit was reduced to 72.94 cents, from 85.10c previously.
Continued weakness in the office market resulted in a persistent vacancy of over 10% throughout the period under review, peaking in September 2010 at 11.1%, compared with a much lower average vacancy rate of 4.3% previously.
The slower office market also resulted in negative rental reversions on leases renewed, with average net rentals declining from R108.16/m² on expiry to R106.33/m² on renewal.
"There are positive signs that the office market is entering a recovery phase. The level of interest from potential tenants has increased sharply, and management is presently dealing with 18 900m² of enquiries. There has also been an improved retention ratio for leases expiring," the group said.
Sycom's retail portfolio fared well, with tenant turnovers increasing by 8.42% in nominal terms and retail inflation significantly lower over the period.
Vaal Mall showed the strongest turnover growth at just over 11%, with Fourways Crossing at 10.6%, N1 City at just over 9%, Somerset Mall at 6% and Paarl Mall at 5.3%.
Sycom said it would acquire high quality retail and office properties, redevelop existing assets, and dispose of properties which no longer fit its long-term objectives.
"Although there are pleasing signs of recovery in the office market, tenants who have not already committed to new space at this late stage in the year are generally reluctant to do so until the new year," Sycom said.
"Accordingly, the board of Sycom does not expect to see a meaningful reduction in the office vacancy before the end of the financial year in March 2011, and the final distribution is therefore likely to remain relatively flat compared to the prior year," it said.
Headline earnings per linked unit was reduced to 72.94 cents, from 85.10c previously.
Continued weakness in the office market resulted in a persistent vacancy of over 10% throughout the period under review, peaking in September 2010 at 11.1%, compared with a much lower average vacancy rate of 4.3% previously.
The slower office market also resulted in negative rental reversions on leases renewed, with average net rentals declining from R108.16/m² on expiry to R106.33/m² on renewal.
"There are positive signs that the office market is entering a recovery phase. The level of interest from potential tenants has increased sharply, and management is presently dealing with 18 900m² of enquiries. There has also been an improved retention ratio for leases expiring," the group said.
Sycom's retail portfolio fared well, with tenant turnovers increasing by 8.42% in nominal terms and retail inflation significantly lower over the period.
Vaal Mall showed the strongest turnover growth at just over 11%, with Fourways Crossing at 10.6%, N1 City at just over 9%, Somerset Mall at 6% and Paarl Mall at 5.3%.
Sycom said it would acquire high quality retail and office properties, redevelop existing assets, and dispose of properties which no longer fit its long-term objectives.
"Although there are pleasing signs of recovery in the office market, tenants who have not already committed to new space at this late stage in the year are generally reluctant to do so until the new year," Sycom said.
"Accordingly, the board of Sycom does not expect to see a meaningful reduction in the office vacancy before the end of the financial year in March 2011, and the final distribution is therefore likely to remain relatively flat compared to the prior year," it said.
