INVESTOR INCOME SCHEDULE

Homemakers Village – Turffontein, Gauteng

30 APRIL 2012 

The day to day management of this property has been outsourced to Centro Property Group (see www.centroprop.co.za)

There are three main factors, which influence the net income of the property. These are vacancies, extraordinary expenditure and tenant arrears.

Further comments on these three factors are as follows:

1.       Vacancies

Homemakers Village has experienced a gradual but steady increase in vacancies over the past months, which was brought about by the recession in South Africa as well as a ongoing decay in the suburb in which the property is located.  The current vacancy is 1,943.41m² (44.26%) and is made up of retail and office premises.  The monthly value of the vacancy is R 112,510.75 and the effect of this vacancy on the investors return is equal to 2.70% per annum.  Enquiries from prospective tenants have shown some improvement over the past few months.  Short term lease agreements at reduced rates are being considered at this time.

Shoprite Virginia currently has no vacancies.

2.       Extraordinary expenses

Extraordinary expenses are those expenses, which do not occur on a monthly basis and are generally once off expenses.  The extraordinary expenses for the reporting period totalled R 46,009.50 and had an effect on the investor’s return of 1.10%.  The extraordinary expenses were made up of agent’s commission, additional payments to suppliers and repairs and maintenance costs.

3.       Tenants arrears

Tenant’s arrears occur for various reasons such as late payments, no payments, part payments, disputes and instances where credits are due to tenants for various reasons. The tenant’s arrears increased by R 50,711.58 and had an effect on the investor’s returns of 1.22% per annum.  Appropriate steps are being taken to rectify this.

4.       Cash reserves

There was no cash reserve held in trust by the property management company for the reporting period.  Existing cash reserves of R 23,142.16 were utilised and had a positive effect on the investor’s return of 0.56%.

148 Leeupoort Street - Boksburg, Gauteng

30 APRIL 2012

The day to day management of this property has been outsourced to Centro Property Group (see www.centroprop.co.za)

There are three main factors, which influence the net income of the property. These are vacancies, extraordinary expenditure and tenant arrears.

Further comments on these three factors are as follows:

1.       Vacancies

There are no vacancies.

2.       Extraordinary expenses

Extraordinary expenses are those expenses, which do not occur on a monthly basis and are generally once off expenses.  There were no extraordinary expenses for the reporting period.

3.       Tenants arrears

Tenant’s arrears occur for various reasons such as late payments, no payments, part payments, disputes and instances where credits are due to tenants for various reasons.  There are no tenant arrears for the reporting period.

                4.       Cash reserves

The cash reserve held in trust by the property management company for the reporting period is equal to R 66,065.21 and had an effect on the investor’s return of 8.17%.  The cash reserves have been increased to make provision for the possibility that the tenant vacates the property.  These cash reserves will then be utilised for the payment of on-going expenses as well as the cost associated with the placement of a new tenant.

Athlone Park Shopping Centre – Amanzimtoti, KwaZulu Natal

Die Meent – Potchefstroom, North West

30 APRIL 2012

The day to day management of these properties has been outsourced to JHI (see www.jhi.co.za)

There are three main factors, which influence the net income of the property. These are vacancies, extraordinary expenditure and tenant arrears.

Further comments on these three factors are as follows:

1.       Vacancies

Athlone Park Shopping Centre has experienced a gradual but steady increase in vacancies over the past months, which was brought about by the recession in South Africa as well as an increase in competition in the immediate vicinity.  The current vacancy is 2,597m² (42.39%) and is made up of retail premises.  The monthly value of the vacancy is R 305,640.00 and the effect of this vacancy on the investors return is equal to 3.91% per annum.  Take note that there is an apparent “increase” in both the vacancy and the value attached thereto.  This is due to premises, which were occupied by non-paying tenants being placed on the vacancy schedule and the increase in the value of vacancies has been adjusted according to the latest budget.  The hospital is now in the process of having its final plans approved by the Department of Health and the local authority, with physical work on the premises expected to commence within the next few weeks.  We are confident that with the placement of this large tenant, that the smaller vacancies will be taken up within the short term.  As part of this drive to fill vacancies, we will need to effect cosmetic upgrades to the property, the bulk of which entails painting.  This is currently under investigation.

Die Meent has not experienced an increase in vacancies, but vacancies which existed since acquisition have not been taken up.  The current vacancy is 860.00m² (20.00%) and is made up of retail premises.  The monthly value of the vacancy is R 55,990.00 and the effect that this vacancy has on the investors return is equal to 0.72% per annum.  The value of vacancies has been adjusted according to the latest budget.  There is a demand for the vacancies from the existing tenant, the South African Police Services (SAPS), but the take up of this space has not been approved by the Department of Public Works (DPW) as yet. 

2.       Extraordinary expenses

Extraordinary expenses are those expenses, which do not occur on a monthly basis and are generally once off expenses.  The extraordinary expenses for the reporting period totalled R 30,000.00 and had an effect on the investor’s return of 0.38%.  The extraordinary expense was made up of repairs and maintenance costs.  Investors need to be aware of the impending costs involved in the placement of tenants as well as those costs associated with the planned cosmetic upgrades to Athlone Park Shopping Centre, which may have a negative impact on their returns.

3.       Tenants arrears

Tenant’s arrears occur for various reasons such as late payments, no payments, part payments, disputes and instances where credits are due to tenants for various reasons.  The tenant’s arrears increased by R 40,616.91 and had an effect on the investor’s returns of 0.52% per annum.  Appropriate steps are being taken to rectify this.

4.       Cash reserves

The cash reserve held in trust by the property management company for the reporting period is equal to R 87,051.64 and had an effect on the investor’s return of 1.11%.  The bulk of this cash reserve will be used for the payment of expenses not paid at close off.

Benoni Hyper – Benoni, Gauteng

30 APRIL 2012

The day to day management of this property has been outsourced to Centro Property Group (see www.centroprop.co.za)

There are three main factors, which influence the net income of the property. These are vacancies, extraordinary expenditure and tenant arrears.

Further comments on these three factors are as follows:

1.       Vacancies

There are no vacancies.

                 2.       Extraordinary expenses

                 Extraordinary expenses are those expenses, which do not occur on a monthly basis and are generally once off expenses. 
                The extraordinary expenses for the reporting period totalled R 22,080.00 and had an effect on the investor’s return of 0.26%. 
                The extraordinary expense was made up of professional fees.

3.       Tenants arrears

Tenant’s arrears occur for various reasons such as late payments, no payments, part payments, disputes and instances where credits are due to tenants for various reasons.  There are no tenant arrears for the reporting period.

4.       Cash reserves

The cash reserve held in trust by the property management company for the reporting period is equal to R 51,063.75 and had an effect on the investor’s return of 0.60%.