Ian Anderson, chief investment officer at Bridge Fund Managers, says JSE-listed property companies have used non-recurring cash flows to support dividend payments. Picture: TEBOGO LETSIE
The Reit capital structure is used globally by property companies in the US, Canada, Netherlands and the UK. SA companies adopted the structure because foreign investors were more familiar with it and understood it better than the property unit trust and loan stock structures that used to exist locally.
Recently property companies reporting results have seen little or even negative dividend growth as they struggle with vacancies and rental reductions. “If they reduce the payout ratio now, it’ll take the pressure off them and they can use the earnings to focus on challenges such as bring their debt levels down,” he said.