Real estate investment trust Burstone expects to report annual results in line with guidance, while it reduced debt by R5bn in the year to end-March.
The group said in a pre-close trading update on Monday it expects a 2%-4% dip in distributable income per share to 101.44c-103.56c.
Five months into its partnership with Blackstone, the world’s largest alternative asset manager, Burstone is already leveraging its expertise to strengthen its portfolio.
Burstone, formerly Investec Property Fund, expects a loan-to-value ratio of 34%-36% for the 2025 financial year.
“The proceeds from the Blackstone transaction, along with proactive refinancing efforts, have helped lower the overall cost of debt. This has been partially offset by additional investments in the group’s Australian platform and ongoing maintenance capital expenditure in SA,” the group said.
The group said the November 2024 Blackstone deal, which resulted in it taking over a majority stake in Burstone’s pan-European logistics portfolio, was expected to deliver a positive, though modest, effect on the group’s results.
Burstone completed the sale of SA properties worth R900m during the reporting period as part of its strategy to manage investments and reinvest in better opportunities.
The SA portfolio’s net property income is expected to remain steady year-on-year, while vacancies are forecast to rise to about 5.5% from 4.2% in March 2024, due to a large industrial asset becoming vacant.
While the retail sector saw net property income growth, the office sector remained under pressure, Burstone said.
Vacancies rose to about 8% from 6.4% previously, with the industrial sector performing best, with leasing activity robust.
The group expects its European business to see positive like-for-like NPI growth, though higher vacancies will partially offset this.
Burstone has opted not to pursue a co-investment opportunity in the German light industrial platform, resulting in the end of the third-party management contract in December 2024.
The group’s investment in Irongate, a real estate investment platform in Australia, continued to perform strongly, driven by growth in assets under management and solid real estate performance, aligning with the initial investment strategy, Burstone said.
“The group will continue to focus on the recycling of direct on-balance sheet investments and using the proceeds to co-invest in fund management platforms, which will result in a significant increase in third-party funds under management,” it said.
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