Correction: The original version of this story had acquisition & capital-raise figures for a Mt Wellington property instead of the Wiri property referred to.
Provincia Property Fund Ltd says about 85% of its rental income is from tenants who provide essential services and will therefore keep operating.
Supported by that, the commercial property fund manager is going ahead with a dividend payout and continuing with a $10.45 million Wiri acquisition.
Managing director Carl Burling said the fund manager had completed stage 1 of its Covid-19 rental risk assessment, including discussions with every tenant: “This gives Provincia strength through the level 4 lockdown period and, as a result, the dividend for the March quarter will be paid in full at 6%.
“We are in ongoing discussions with the remaining 15% who are affected by the lockdown. Most of these tenants will be entitled to some rental abatement under their leases. We are working through this on a case by case basis over the next couple of weeks.”
Mr Burling said the fund was conservatively managed, had modest bank borrowings and was well diversified: “Our tenants are very solid: food, electricity, storage, basic household requirements, water, etc.”
He said the fund had maintained a steady 6% pretax cash dividend since inception in 2017, and the recent official cashrate cut would benefit the fund.
“With the full support of our bank, we are continuing with the $6.56 million capital raise for the acquisition of 18 Noel Burnside Rd, Wiri. Commitments to date are encouraging and we are confident the fund will raise the equity required to settle the purchase of this excellent property.”
1 November 2019: Provincia fund buys on Carbine Rd, announces capital-raising
11 October 2019: Provincia industrial property fund settles 5th acquisition
Attribution: Company release.