Our opinion on the current state of DIB

Dipula is a real estate investment trust (REIT) which is 30.24% owned by Coronation. On 6 June 2022, the company repurchased all of the Dipula A-shares in issue in consideration for the issue of 2.4 Dipula B-shares for every Dipula A-share. The company describes itself as "...a Johannesburg-based internally managed REIT that owns a diversified portfolio of 186 properties worth about R9bn, comprising mainly retail, office and industrial properties located across all provinces in South Africa. The majority are located in Gauteng. Dipula also selectively invests in residential rental stock." Obviously, this is a REIT which depends on the South African economy. In the current recessionary conditions it is doing reasonably well, but its shares (especially the "B" shares) are relatively thinly traded which makes them unattractive for private investors. In its results for the six months to 28th February 2023 the company reported revenue of R691,5m up from R677,4m in the previous period. Headline earnings per share (HEPS) were 27,98c compared with 35,88c in the previous period. The company said, "Contractual rental income for the period increased by 3% to R556 million (2022: R541 million). Prudent cost management ensured that property-related expenses increased by a below inflation 3% to R239 million (2022: R232 million). Net property income was slightly ahead of the prior period at R447 million (2022: R441 million)". In a trading statement for the year to 31st August 2023 the company estimated that distributable earnings per share would fall by 22,18%. In our view the simplification of the share structure is a boon for this share which trades at 57,5% of its NAV. We expect the share to continue to perform well in the future.