Oryx Properties has demonstrated resilience in its financial performance for the period ending June 2024, reporting a 5.4% year-on-year increase in revenue to N$237.2 million, up from N$225.0 million in December 2023.
According to a report by Simonis Storm, this growth was driven by positive rental escalations and strong tenant renewals, underscoring the company’s ability to maintain a robust income stream despite a challenging economic environment. Net rental income also saw a healthy rise, growing by 5.3% to N$162.4 million, despite a 5.7% increase in property expenses. The company’s EBITDA margin remained stable at 68.5%, reflecting efficient operational cost management and a disciplined approach to expense control.
The retail sector continues to dominate Oryx’s portfolio, contributing 72% of total revenue, followed by industrial (17%), office (8%), and residential (3%) sectors. With 89% of revenue generated from retail and industrial tenants, the company’s portfolio resilience is bolstered by strong consumer footfall and sustained demand for logistics spaces. Notably, the vacancy rate improved significantly, dropping to 2.0% from 5.4% in December 2023, marking a 63% year-on-year improvement. This reduction highlights the success of Oryx’s leasing strategies and improved occupancy rates across its core assets.
Headline earnings per linked unit declined to 65.24 cents per unit (cpu) from 75.68 cpu in the prior period, primarily due to the non-recurring N$33 million settlement income recorded in the previous year. However, core earnings, as measured by Funds from Operations (FFO), remained solid at N$74.2 million, translating to an FFO yield of 6.6% on net asset value (NAV). Adjusted FFO (AFFO), which excludes maintenance capital expenditures and straight-line rental adjustments, stood at N$67.3 million, reflecting the company’s underlying earnings capacity. The distribution per linked unit increased by 2% year-on-year to 52.50 cpu, equating to a distribution yield of 8.2%. The AFFO payout ratio of 80.8% aligns with industry norms while ensuring sufficient liquidity for capital projects.
Oryx’s financial position remains robust, with gearing improving to 36.1% from 37.3% in December 2023. Total interest-bearing borrowings amounted to N$1.67 billion, with the weighted average cost of debt decreasing to 9.3% from 9.9%, supported by a 75 basis points cut in the repo rate and improved funding efficiency. The company has also increased its hedge ratio to 49%, mitigating risks associated with interest rate volatility. The NAV per linked unit rose to 2,436 cpu, up from 2,157 cpu in December 2023, although the discount to NAV widened to 47.4%, reflecting ongoing market skepticism. The implied capitalisation rate on the portfolio stands at 8.7%, with an equity trading yield of 10.3%, indicating an attractive valuation relative to income-generating assets.
The investment property portfolio was valued at N$4.242 billion at the end of the period, up from N$4.167 billion in June 2024, following capital additions of N$74 million. The valuation increase reflects strategic investments in key developments, including the Maerua Mall refurbishment and the Goreangab project, rather than broad-based revaluation uplifts. Fair value adjustments on investment properties were minimal at N$1.85 million, suggesting muted revaluation gains in a stable market environment. Cash generated from operations remained steady at N$128.6 million, with a tenant collection rate of 101%, underscoring the high quality of Oryx’s tenant base. However, net operating cash flow was slightly negative at N$2.1 million due to increased capital expenditure and finance costs.
Looking ahead, Oryx Properties is well-positioned to capitalize on Namibia’s projected economic growth of 3.8% in 2025, driven by infrastructure investment and expanding commercial activity. Lower interest rates are expected to enhance financing flexibility, potentially narrowing the NAV discount over time. However, risks such as tenant concentration in the retail sector, inflationary pressures on property costs, and regulatory uncertainties remain key challenges.