Property owners wait for municipal improvements post elections

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‘As landlords across the board, we have to think about how we survive with the disruption around us, rather than sitting around and waiting for a solution to happen’: CEO Izak Peterson.

SIMON BROWN: I’m chatting now with Izak Peterson, CEO of Dipula Properties. Year-end results for August saw revenue up 11%, distributable earnings per share up 8.6%.

Izak, appreciate the time. Let’s start with distributable earnings. You are ahead of your own guidance, which was 7-8% growth. You’re guiding for 8-10% next year. What’s driving the beat? What’s driving the optimism for the next financial year?

IZAK PETERSON: Simon, we’ve based on really good acquisitions, and the underlying portfolio is doing fairly well. We have reduced vacancies. You’ll have seen that our vacancies in the prior year were sitting at around about 8%; that has all gone down to 6% at the reporting date, and trended even lower post the year-end.

We’re also keeping a very close eye on expenses, so we’re containing that quite nicely.

Read: Dipula delivers stable returns with 8.6% dividend growth Dipula lifts full-year dividend as earnings rise Dipula acquisitions, wage pressures, and household improvements

And we’ve been disposing – we bought 14 properties in the past 12 months, of which about four transferred. But in that same period we actually sold about 20 properties. Buying larger properties, selling smaller properties, and utilising the same team actually leads to a situation where we can save some costs.

SIMON BROWN: I was also noticing your new leases and renewals both coming in at 6.5%, 6.7%, nicely ahead of inflation, and good numbers locking in for around two-and-a-half-plus years’ duration on average as well.

IZAK PETERSON: Yes. And we saw a positive rental reversion rate of about 4.2%. So I think our team is working very hard in ensuring that we renew at decent levels. But it’s really a question of rent-to-turnover on the retail side. That number is looking healthy for us; it’s overall 4%.

I think for as long as trading is decent in the centres that we own, we should be able to achieve decent rentals on leases coming up.

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