Oryx Properties: Strong Profits, Dunes Mall Acquisition

  • Strong Financial Performance: Oryx Properties reports robust financials with a positive fair value adjustment, steady income, and growth.
  • Strategic Acquisitions: The acquisition of Dunes Mall marks the beginning of Oryx's ambitious growth strategy in Namibia.
  • Challenges and Opportunities: Despite tenant retention challenges and rising interest rates, Oryx Properties remains resilient and optimistic about future growth.
Hammerson Financial Review

Oryx Properties Limited, a leading property investment company in Namibia, has reported robust financial results for the year ending June 30, 2023. The company, listed on the Namibian Stock Exchange (NSX), has shown remarkable growth and resilience in a challenging economic environment, positioning itself as a key player in the Namibian property market.

Solid Financial Performance

Oryx Properties’ financial report reveals several key highlights, showcasing its financial strength and growth potential. Here is an overview:

Table 1: Financial Highlights

Financial Metric2023 (N$’000)2022 (N$’000)Change (%)
Net Property Income235,432242,225-2.8%
Change in Fair Value of Properties99,74546,823+113.0%
Total Comprehensive Profit190,923105,856+80.3%
Basic Earnings per Linked Unit287.82 cents222.31 cents+29.6%
Headline Earnings per Linked Unit121.56 cents146.82 cents-17.2%
Net Asset Value per Linked Unit2,395 cents2,203 cents+8.7%
Distribution per Linked Unit105.25 cents101.75 cents+3.4%

Steady Income and Positive Fair Value Adjustment

Despite the challenging economic climate, Oryx Properties achieved a net property income of N$235.4 million for the fiscal year ending in June 2023. This figure, while slightly lower than the previous year, indicates the company’s ability to maintain a steady income stream from its property portfolio.

One of the standout factors contributing to Oryx’s positive performance is the significant change in the fair value of its investment properties. The portfolio was independently valued at an impressive N$3.1 billion, reflecting a notable increase from N$2.8 billion in 2022. This positive fair value adjustment of N$99.7 million is a testament to Oryx’s strategic property acquisitions and solid tenant retention. In particular, the retail segment, anchored by Maerua Mall and Baines Centre, experienced remarkable value growth, with increases of N$40 million and N$21 million, respectively.

Table 2: Portfolio Valuation Breakdown

PropertyValuation (N$’000)Fair Value Adjustment (N$’000)
Maerua MallN/A+40,000
Baines CentreN/A+21,000
Other PropertiesN/A+39,000
Total Portfolio3,100,000+99,745

Strategic Capital Expenditure

Oryx Properties also demonstrated its commitment to enhancing its property portfolio through strategic capital expenditure. In 2023, the company invested a total of N$72 million in various projects and property upgrades. Notable projects included a N$4 million investment in a solar project at Maerua Mall, Gustav Voigts Centre, Erf 135 Scania, and Urban Village at Elisenheim. An additional N$22 million was allocated to upgrade the Gustav Voigts Checkers offering, and N$30 million was invested in a new industrial warehouse on Erf 3519 Iscor Street. Furthermore, the Group acquired the Maerua Crossings right-of-use investment property for N$6 million.

Table 3: Capital Expenditure Breakdown

ProjectInvestment (N$’000)
Solar Project (Multiple Properties)4,000
Gustav Voigts Checkers Upgrade22,000
Industrial Warehouse (Erf 3519 Iscor St)30,000
Maerua Crossings Acquisition6,000
Total Capital Expenditure72,000

Distribution to Unitholders

Oryx Properties has consistently rewarded its unitholders with attractive distributions. For the year ended June 30, 2023, the company declared a distribution of 105.25 cents per linked unit to existing unitholders, amounting to N$92 million. Additionally, new unitholders who participated in the rights issue, which closed on July 14, 2023, received antecedent interest of 50.00 cents per unit, totaling N$13.5 million.

Table 4: Distribution Summary

Distribution TypeDistribution per Linked Unit (cents)Amount (N$’000)
Existing Unitholders105.2592,000
New Unitholders (Antecedent)50.0013,500
Total Distribution for 2023155.25105,500

Challenges and Opportunities

Oryx Properties has navigated several challenges, including a decrease in tenant retention, which fell to 84% from 97% in the previous year. Rising finance costs, attributed to interest rate hikes, also posed a challenge, with costs increasing by 20% during the year. Despite these challenges, the company’s ability to maintain rental income and achieve substantial fair value adjustments demonstrates its resilience and adaptability.

Looking ahead, Oryx Properties is optimistic about the economic landscape in Namibia. According to the Bank of Namibia’s June 2023 Quarterly Bulletin Report, the country’s real GDP growth registered a solid 5% in the first quarter of 2023. While some sectors, such as manufacturing and financial services, faced contractions, others, including wholesale, retail, tourism, and transport, experienced significant growth. This growth bodes well for Oryx Properties, as tenant turnover in these sectors remained strong throughout the year.

Despite the challenging interest rate environment, Oryx Properties is confident in its growth prospects. Rental escalations, including those from Dunes Mall, acquired subsequent to the fiscal year-end, are expected to boost turnover in the short to medium term. The acquisition of Dunes Mall marks the beginning of Oryx’s ambitious growth strategy, aiming to expand its total asset base to N$4.5 billion by 2025. The company is also actively exploring additional acquisition opportunities within Namibia.

Table 5: Salient Dates for Distribution

EventDate
Last Date to Trade cum DistributionFriday, 15 September 2023
Units will Trade ex-DistributionMonday, 18 September 2023
Record Date to Participate in the DistributionFriday, 22 September 2023
Payment of Debenture InterestFriday, 6 October 2023
Distribution Interest for 2023105.25 cents (June 2022: 101.75 cents)

Subsequent Acquisition: Dunes Mall

A significant development for Oryx Properties occurred on August 1, 2023, when the Group concluded the acquisition of Dunes Mall (Proprietary) Limited, valuing it at N$628.25 million. This strategic acquisition positions Oryx Properties to capitalize on the coastal region of Namibia, where Dunes Mall is located. The acquisition was funded partially through equity, with 49% of the acquisition price covered by the rights issue. The remainder was settled using a N$500 million bridge facility, which will be converted into a preference share facility with RMB. This facility carries a four-year tenure and is priced at 3M JIBAR plus 1.39%. A portion of the facility was used to repay the Nedbank N$75 million facility, and the RMB N$100 million facility is expected to be repaid in September 2023.

Conclusion

Oryx Properties Limited’s strong financial performance, strategic acquisitions, and commitment to enhancing its property portfolio demonstrate its resilience and growth potential in the Namibian property market. With a solid foundation and a clear growth strategy, the company is poised for further success in the coming years.

Related

Rateweb

South Africa’s primary source of financial tools and information

Contact Us

admin@rateweb.co.za

Disclaimer

Rateweb strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions.

Rateweb is not a financial service provider and should in no way be seen as one. In compiling the articles for our website due caution was exercised in an attempt to gather information from reliable and accurate sources. The articles are of a general nature and do not purport to offer specialised and or personalised financial or investment advice. Neither the author, nor the publisher, will accept any responsibility for losses, omissions, errors, fortunes or misfortunes that may be suffered by any person that acts or refrains from acting as a result of these articles.