Our opinion on the current state of FTBPROPB(FTB)Fairvest (FTB) is a real estate investment trust (REIT) which specializes in investing in smaller rural and non-urban shopping centers that are focused on consumers who have a lower living standard measure (LSM). It has 131 properties valued at R11,8bn. This is broken down as 67% retail, 23% office, and 10% industrial. It also owns 60,9% of Indluplace (ILU) and 5,1% of Dipula (DIB).
The company boasts that it is the top-performing REIT in South Africa with a return to investors of just under 18% for the year. In its results for the six months to 31st March 2024, the company reported revenue up 4,9% and headline earnings per share (HEPS) up 5,3% for the "A" shares and down 6,9% for the "B" shares. The loan-to-value (LTV) was 32,6% and vacancies were 5,3%. The company said, "We anticipate net property income growth, on a like-for-like basis exceeding inflation and positive renewal reversion from all sectors for the full financial year."
In a pre-close update on 19th June 2024, the company said, "Notwithstanding the tough macroeconomic and consumer environment, stubborn inflation and elevated interest rates, the South African retail portfolio has achieved like-for-like tenant turnover growth of 7,1% and maintained a low vacancy rate, by rental, of 1,3%."
Technically, the share was in a steady upward trend since April 2020 but has been moving sideways and upwards recently, especially since the latest results. Fairvest remains one of the better options in the property sector.
