- Makes P50m profit
- FAR backed by long term leases
- Uses land bank for expansions
Commenting on behalf of the Board of Directors, Vidya Sanooj, one of the directors, says there has been agility in swiftly adapting to changes in consumer behaviour and new ways of thinking and working.
FAR Property recorded a 4 percent increase in revenue from P67.48 million for the six months to December 2020 to P69.98 million for six months to December 2021. Sanooj says rental yield continues to remain at a stable level of 10 percent despite the negative impact of the COVID-19 pandemic.
Rental yield is the return a property investor is likely to achieve on a property through rent. It is a percentage figure calculated by taking the yearly rental income of a property and dividing it by the total amount that has been invested in that property. Further, FAR boasts a very healthy yield for the completed projects.
The company’s net income from operations increased by 6 percent from P47.58 million for the six months to December 2020 to P50.62 million for six months to December 2021. Sanooj says FAR’s vacancy rate is negligible. The vacancies across the portfolio remain below 5 percent, which she says is encouraging, given the tough trading environment. Profit for the year attributable to linked unitholders stood at P50.2 million.
In order to ensure continued growth and stability, FAR says there are new projects in the pipeline to fund for growth and stability, which is aligned to the company’s future oriented strategies for new Investments. “Four new investments and one acquisition will be completed before the end of the current financial year,” the company announced, adding further that it brags of a very strong commercial land bank at its disposal for strategic growth.
Currently the value of the company’s portfolio is at P1.37 billion but will increase as a result of planned new investments and acquisitions. FAR says for business continuity, it is backed by long-term leases. According to Sanooj, FAR tenant mix is dominated by Grade A tenants. Under Grade A, the company speaks of premium tenants, including retail tenants with national and international Brands.
Sanooj says 78 percent of the properties are occupied by Grade A tenants. Moreover, Grade B, which comprises local tenants and medium-sized businesses with well- established business operations, have occupied 19 percent of FAR’s property portfolio. Grade C tenants, which comprise new start-up companies with small business operations, sit at only 3 percent of the FAR property portfolio.
FAR also has a balanced property portfolio. At least 53 percent of its portfolio is in the industrial property space, 37 percent in the commercial property space while the remaining 10 percent is in the residential space. However, the largest revenue spinner is the commercial properties which accounts for 50 percent of total revenue. The industrial properties accounts for 42 percent while residential takes a paltry 8 percent.
FAR has operations in Botswana, South Africa and Zambia. Botswana makes up 86 percent of the company’s total revenue while South Africa and Zambia account for 12 percent and 2 percent respectively.