Good morning, ladies and gentlemen. Thank you very much for your patience. We're about to start the presentation, and please accept our sincerest apologies for the delay. Just to note, recording of the presentation will be uploaded to Delta's website, deltafund.co.za, in case you aren't available for the duration of the presentation. The team will take questions after the webcast and at which time we will break for five minutes just to allow questions to come through before resuming with the Q&A. I now hand you over to Mr. Siyabonga Mbanjwa, the Delta CEO.
Good afternoon, ladies and gentlemen, and I must apologize that I am greeting you at this time and not two hours earlier. Unfortunately, circumstances that are beyond our control have forced us to start a bit later, but we also could not breach JSE rules and start this presentation before the SENS publishing our annual results, being out there in the market. We have now received confirmation that it has been published. If you could download the results at your own time, you know, so that you do have it with you. Today, we are here to present our annual results for the period ended 28th February 2022.
In terms of the agenda for today, I will take you through our business update, our strategy update, and my colleague and Chief Financial Officer, Marelise de Lange, will take you through the financial review. I will then conclude, and there will be an opportunity for all of you to pose any questions that you might have, and we will be able to answer those questions. We're very proud of the fact that Delta is celebrating 10 years as a JSE-listed real estate investment trust this year, in November to be exact. Delta is emerging as a turnaround story. The external environment continued to be unforgiving. The economy remained under pressure, resulting in high vacancies and affecting all landlords. Delta's sovereign underpinned portfolio showed a lot of resilience. Stability has been restored and today's results reflect this.
Our strategic planning process has been completed and puts us in good stead to complete the turnaround. What are the highlights in terms of the results for the year ended February 2022? Firstly, our investment property sits at ZAR 7.9 billion. That is a slight reduction from the ZAR 8.2 billion that was reported in the last period. Marelise de Lange, our CFO, will elaborate as to why there was a devaluation. On the right-hand side, you can see that distributable earnings per share were at ZAR 0.369. This is an increase from the ZAR 0.313 that was reported in the last reporting period.
On the right-hand side, again, at the top of the screen, you will see that our sovereign underpinned JSE listing status has increased from the current 81.3% in the period, in the last period, to 84.6% in this last reporting period. Our loan to value sits at 57%, which is a slight increase from the 56.5%, that was reported in the 2021 financial year. The main reason for this slight increase is mainly due to the devaluation of the portfolio, again, which Marelise, our CFO, will elaborate on. Our NAV on the bottom left corner of the screen, you will see did decrease slightly to ZAR 4.69, again, largely due to the slight devaluation in our portfolio. Again, Marelise will elaborate as to all the other factors that impacted this.
We are very proud of the fact that our average collections increased to 112.7%. This is a massive increase from 87% in the 2021 financial year. Our broad-based BEE level has improved from level two to level one. This, of course, becomes very important when you engage with government because it has to do with the level of competitiveness when tenders adjudicated. We're extremely proud and want to thank our staff and all of those that have contributed towards this achievement. Our interest cover ratio remained the same at 1.9x , which showed some stability, but of course, we would like this to improve going forward. In terms of a detailed business update, vacancies throughout the country have increased over time to 3 million square meters.
This is the highest that it ever has been in the country and is an indication of the state of the economy and the market that we are operating in. B-grade offices specifically were hardest hit, with national vacancies in excess of 18.8% as at the end of December 2022. We refer you to the B-grade offices because a large proportion of Delta's portfolio comprises of B-grade offices. Delta's vacancies did increase to 31.3% from 23.6%, largely due to a number of factors which we will go into throughout this presentation. One of the major contributors towards this vacancy increase include the Isivuno House in Pretoria, where we had a single tenant that unfortunately vacated. It also included 101 De Korte, which is a building that we own in Bloemfontein. It also included Regents Place, a building that we own in Pretoria.
We also had a single tenant. Two of the three tenants that I've mentioned so far are government. One is a private sector entity that decided to move out of the area. Two others that are worth mentioning in the Northern Cape is a building called 5-7 Elliot with 2,300 square meters and Trustfontein in the Free State with a building that's just under 5,000 square meters. In terms of new leases, we are very proud of the fact that we were able to sign 17,586 square meters of new leases in this last reporting period. In addition to this, we have renewed 70,548 square meters.
Post year-end, and probably most importantly, 126,233 square meters of expired month-to-month leases were renewed with DPWI. An additional amount of 52,000 of current month-to-month leases with DPWI are advanced stages of negotiations. Rental reversions for the year for these renewals were at -29%, and these reversions were largely due to the following buildings. First one is the Phamoko Towers building with a -59%. What we're very proud of is the fact that this particular building, we've been able to sign a nine-year lease with the client. Secondly, Hensel Towers, which is based in Polokwane. We had a rental reversion of a -53%. Again, we're very proud of the fact that we were able to sign a five-year lease with this tenant.
Finally, Embassy Building based in Durban with a negative rental reversion of 10%, and we've been able to extend this lease for 11 months, and we are working on ensuring that we extend this lease for an even longer period. This basically shows us a summary of what I have just articulated, showing that we started off with 100 buildings at the beginning of the financial year. We did sell 1 building. We ended up with 99 buildings. In terms of square meterage, we started off with 909,000, roughly. We ended off with 904,000 square meters. In terms of the vacancy then, we started off with 214,000 that was vacant. We ended off the year with 283,000 square meters that was vacant.
The movements in terms of how that happened are indicated on the screen with the new letting of 17,500 and the various items or the various buildings that are listed there that contributed towards this vacancy. This is how we moved from a vacancy of 23.6% down to a vacancy or up to a vacancy of 31.3%. Now, this picture indicates a GLA or gross lettable area split in terms of geographical area or in terms of the different provinces around the country. On your left-hand side, you can see that Gauteng has the biggest slice in terms of GLA at 41.2%. KwaZulu-Natal follows with 30.5%, the Free State at 9%, and so forth.
On the right-hand side, the diagram depicts Gauteng Province, again, showing that the proportion of vacancies is sitting at 40%, which is more or less in line with the GLA proportion. KZN at 31%, more or less in line with the 30.5% GLA. However, when we get to the Free State, you see that the proportion of vacancies when it comes to the Free State is higher than the proportion in terms of GLA. The Northern Cape, the proportion is at 7%, whereas the GLA sits at 4%.
Therefore, there's a misalignment there, and it starts to tell us that there's a problem and perhaps something that we need to fix in the system. If you look on your right-hand side again, the Eastern Cape is sitting with 5.9% in terms of proportion of vacancies. However, in terms of GLA, it sits at 2%. Therefore, vacancy proportion is almost three times the size. Again, it means that we need to hone in and establish why. Mpumalanga sits at 1.5% of vacancies, whereas the proportion of GLA is sitting at 3%. Therefore, Mpumalanga is performing better than some of the other provinces from a vacancy perspective. Limpopo sits at 0.5% vacancies.
However, its proportion is 5%, so Limpopo is doing pretty well in terms of vacancies as the vacancies there are quite low. The North West, 0.2% versus 0.6%, I beg your pardon. Finally, the proportion of vacancy contribution from the Western Cape is only at 0.1%, whereas, the proportion of GLA, it sits at 4%. Again, the Western Cape is performing better than some of the other, provinces. I'll now take you through valuations and disposals. I did indicate earlier that there was a devaluation. That devaluation amounts to ZAR 314 million, and this represents about 3.8% of the portfolio. This is a reduction of,
When compared with the devaluation in the previous financial year, which was ZAR 553 million, representing 6.3% of the portfolio. This reduction in valuations has had a major impact on the LTV, as I indicated earlier, not just the LTV, but the net asset value and a number of other factors. Again, our CFO will also touch on the impact in terms of our income statement. The biggest drivers of this devaluation is the slow economy, so it's an external factor. It's increased vacancies to record levels, of course, outside as well as inside the portfolio. And it's also a function of market rentals. I mentioned rental reversions. Therefore, if there are rental reversions, this also needs to come through in terms of our valuations. What we are doing as a management team is to ensure that we reduce the devaluation going forward.
What we would like to see is to start seeing some uptick in terms of valuations. Disposals. We are targeting a loan-to-value of 40% by 2025. It's not going to happen overnight. However, it is possible to achieve through an aggressive disposals and leasing rollout program. We are therefore going to be fast-tracking our disposals. I indicated earlier that we were able to successfully dispose of one property in this last financial year. Post the end of the financial year, we are busy with transactions of at least ZAR 300 million that we are hoping to close in the next few weeks and the next few months. We have identified 26 properties with a market value of ZAR 787 million for disposal. These are held for sale and are reflected in our financials. Capital expenditure.
Capital expenditure remains a major focal point going forward. We have to date, in this last financial year, spent just under ZAR 113 million up to February 2022. We are also continuing to roll out on our CapEx program. This is a very, very critical program for us to rebuild trust with our tenants and to ensure that we continue to do what we had said we were going to do. It also will eventually have a positive impact in terms of our valuations in the short to medium term. We have listed some of the projects that we have worked on in terms of our capital expenditure program, starting with Poynton's building, which is our largest building at 73,000 square meters located in Pretoria CBD.
We've done various projects in this building, and we have just listed some of the most recent projects that we have completed there. We have previously shared some of the photos from this building indicating the scope of works that we have embarked on in here. We are happy to report that the fire lift project is 98% complete at Poynton's, and the West Block lift project is expected to be fully completed and commissioned around June, July 2022. The Veritas Building is another building where we have spent on capital expenditure, where we have upgraded the HVAC system. We have upgraded our electrical connections and ensured that there's electrical compliance. We have also done phase I of the lift upgrade project, and all of these have already been completed earlier this year.
We have listed a number of buildings where we have also recently completed various capital expenditure projects, starting with Servamus Building, which is located in Durban, where we've replaced the main chiller units. Mayor's Walk Building, which is located in Pietermaritzburg. Smart Exchange, which is located in the Durban CBD. Hallmark Building in Pretoria CBD. The Embassy Building in the Durban CBD. Tembo Towers and Hensel Towers are both located in Polokwane. These are just some of the projects that we have executed in the recent past. In terms of how we have split the capital expenditure throughout the country, the largest portion went to Gauteng as our largest province. It was followed by KwaZulu-Natal, and thereafter followed by the Free State at 8%.
That was then followed by the Western Cape at 6.8%, then Mpumalanga and the Northern Cape at 5.3% each, then it was the North West, then the Limpopo Province, and we are still planning to spend a little bit in the Eastern Cape as well. This picture or these pictures are basically showing some of the projects that we have completed. This is a cooling tower installation in progress at the Embassy Building in Durban. The pictures that you see were taken at the Poynton's Building that I mentioned earlier on, which is located in Pretoria. On the left-hand side, this was the lift upgrade project, and shows you the lift as it was being upgraded and on the right-hand side as it was completed.
On the extreme right, you can also see the lift motor room, which was also upgraded as part of the project. In terms of some of the environmental and external factors that impact Delta as well as a number of other companies, I'd like to start off by talking about COVID-19. We are closely monitoring latest developments regarding COVID-19. We are encouraging staff members to be fully vaccinated, especially those that are client-facing. As far as impact on Delta, we've had minimal rental relief that has been required from Delta, and this is largely due to our sovereign dominant portfolio. We will continue to monitor as we go forward as far as COVID-19 is concerned. Secondly, the July 2021 unrest or as others would call looting. We sympathize with those that were hardest hit by this event. Some of Delta's retail tenants were definitely affected in the Durban CBD.
Due to the nature of Delta's portfolio, which is largely offices and limited to retail on the ground floor, there was minimal financial impact on Delta. Of course, the retail tenants that were affected, we have assisted them in whatever way that we could. What is most important to note here is that the financial impact on Delta was minimal. Finally, the KZN floods that took place in April and May of this year. Again, we sympathize with those that were hardest hit by the floods, especially those that lost loved ones in the process. Again, we were close to our tenants and to our staff, and thankfully, we are not aware of any that did lose their lives or whose loved ones were lost. Some Delta buildings were affected, but temporarily.
For example, we did lose power in some of the buildings for a temporary period. We also did have some flooded basements or ground floor, but there was never a major impact on our buildings. The financial impact on Delta once again was minimal. Strategy. I'm very happy to report that, firstly, we started by engaging our Exco and the board in crafting a new strategy for Delta. In doing so, we had to look at where we come from. As a 10-year-old JSE-listed business, we had to look at where we came from, how we were formed, the various milestones that we have traveled. We had to look at where we are and look at where we are going.
We had to look at how we are impacted by various environmental factors, and then craft a plan that will take us forward. What you see on the screen there are some of the comparisons between where we were 10 years ago and where we are today. For example, on the extreme left, you'll see that in 2012, we started with a ZAR 2 billion portfolio. Today, it's a portfolio of just under ZAR 8 billion. We started off with 20 buildings. Today, we've got 99 buildings. On the extreme right, you'll see that the number of staff members, we started off with just eight staff members. We now have 99 buildings. 99 buildings, 99 staff members, so it's one building per person at this stage. We're very proud, of course, of the fact that when we started, we were a level two BEE-rated entity.
Today, we're a level one BEE-rated entity. Again, I'd like to stress, when we started off in 2012, we spent ZAR 21.5 million on CapEx. In this last financial year, we spent ZAR 112.8 million on CapEx. How can we summarize the strategy that has been developed? This diagram does exactly that. It starts off with our vision. Our vision has been tweaked slightly, but it pretty much still remains where it is. We've had to bring in the importance of our landlords going forward as a business. We want to be a pre-eminent, sovereign, underpinned property fund offering sustainable returns while being the landlord and employer of choice. That is where we want to go.
In terms of our mission, we provide exceptional tenant experience, we deliver superior, sustainable returns, we develop and grow our people, which is critical, and we do all of this by continuously optimizing our assets. What are our values then? Our values, firstly, we want to walk the extra mile, and we instill these values in our staff, and we use these values to also determine the extent to which our staff live them. Secondly, we want to get involved. Thirdly, we are dependable. Fourthly, we have to be agile. Fifthly, we have to challenge the norm. Considering where we are, considering where we come from and where we want to be, we have to constantly challenge the norm. Finally, we've got to defy expectations. How are we going to achieve all of this?
We have come up with five strategic pillars that define more or less how we want to move forward. Firstly, we want to rebuild trust. This is critical. We need to rebuild trust with all our stakeholders, starting from our tenants to our investors, to our staff and general members of the public. We therefore are working very hard to ensure that this is done. Secondly, we want to be efficient as far as our operations as possible. We cannot afford to spend more than we should. We need our processes to be as efficient as possible. We therefore are placing a lot of emphasis on this over the next few months, but also over the next three years. We need to be people-centered. Without people, we cannot achieve any of our goals.
Therefore, we are developing this within the business and placing a lot of emphasis on our people. This is basically from our board to our senior executives, senior management, and all the way, including all of our staff. Fourthly, leasing and business development has to be in the forefront in anything that we do. We wanna make sure that our staff, all of them know this. This is not only the role of the leasing team, but it's a role of all staff members. We need to make sure that we capitalize on opportunities and that we win a lot more deals than we are at the moment. Finally, but very, very important, the last pillar deals with the optimization of the portfolio and the optimization of the capital structure. We will optimize our portfolio through disposals.
We'll optimize the portfolio through conversions, and we will optimize our capital structure by ensuring that we restructure our debt, and of course, down the line, when we are ready to start growing, we need to ensure that we bring in some cash into the business and that we are able to then move forward as a business. That is a summary of our strategy at this point in time.
Apologies. I seem to have gone the wrong direction.
Okay. I would therefore like to summarize our strategic and financial objectives. Firstly, in terms of strategic objectives, we want to diversify the portfolio. I have indicated the headwinds. I have indicated the external environment that affects us. I have indicated the fact that we have largely B-grade office buildings. We therefore have to be agile. We have to respond to the market.
We do want to diversify the portfolio by 2025. However, it's important that we a minimum of 50% of the portfolio still remains anchored by sovereign tenants. I've indicated how this has allowed us to go through some of the challenges that we have had in the recent past. We also want to ensure that our vacancy factor is on par or below SAPOA average, the property sub-sector by 2025. In terms of our financial objectives, we want to achieve an interest cover ratio of 2.5x by 2025. We also want to reduce our loan-to-value to 40% by 2025. Boldly, we also want to increase the property investment portfolio to at least ZAR 10.5 billion by 2025.
Some of you may ask, "But how?" Well, we cannot continue to reduce the size of this portfolio forever. At some point, we will need to bottom out and start rebuilding. It is that rebuilding that we want to start placing a lot of focus on, but we do have to complete our turnaround strategy first. Now, Delta takes ESG very, very seriously. We are working hard to ensure that ESG is embedded in our strategy, it's embedded in our operations, and that we are able to report to the market some of our achievements that we are starting to make on ESG. However, we need to start at the beginning. What we have done, we've appointed a firm of subject matter experts that are helping us through this process.
The first part of it includes establishing a baseline around ESG performance and disclosure by conducting a peer benchmarking exercise against our international and domestic REIT peers. It also involves developing a framework that we can then use going forward, and this is gonna be on best practice on sustainability and climate disclosure standards. We are monitoring the IFRS sustainability standards for sustainability and climate change disclosure and reporting. This was published earlier this year. We are doing the same with the Johannesburg Stock Exchange guidance documents for sustainability and climate change disclosure and reporting. This was published towards the end of 2021.
Finally, we are members of the SA REIT Association, and the SA REIT Association has appointed an advisory committee and its supporting working groups that were established earlier this year, and that committee is going to be developing SA REIT's member guidance for ESG and sustainability disclosure and reporting. This is also based on IFRS. It's also based on JSE's guidance documents, among others. We are looking at the ESG framework being split, or the development and implementation thereof being split into three different phases. Phase I is the benchmarking process that I've referred to. Phase II involves the development of the framework or the roadmap. Phase III involves the implementation of the framework. In terms of our targets going forward, we would like to complete phase I and phase III in this current financial year.
We would also like to have started with the implementation of this framework by the time we finish the financial year. I indicated earlier that this framework will allow us to ensure that we can integrate ESG into our strategy. This will allow us to ensure that we can integrate ESG into our operations. It'll also allow us to select appropriate internal and external monitoring and reporting frameworks, which we can then use when reporting to the market. It'll also help us make significant progress on ESG matters in our integrated annual report and other public reports via Delta's website, which I'm sure you will start seeing from the end of this financial year. I will now hand over to my colleague and CFO, Marelise de Lange, to take us through the financial review.
Thank you, Siya, and welcome, everybody, for joining us this afternoon for our results presentation. Again, we do apologize for the delay in getting the results started. If we go to just the first highlights that we have, I'm gonna reiterate some of the points that Siya spoke about earlier, and simply to unpack some of these a bit more. When we talk about our loan-to-value of 57%, that's on our left-hand side at top left-hand side. It changed 50 basis points from our prior financial year, which was 56.5%. The main drivers in our loan-to-value had to do with our investment property being or decreasing.
That's investment property, including the properties held for sale by 4%, as well as then a counter of that and the decrease of our interest-bearing borrowings of 4.4%. We paid ZAR 210 million towards our debt, and that had a counter impact for us together with the CapEx that we spent on our loan-to-value. When we go to the bottom left, distributable earnings, Siya spoke about that one earlier in terms of we had a distributable earnings per share of ZAR 0.369 for the year compared to ZAR 0.3133 in the prior year. That translated to ZAR 263.6 million for the current year in rand value, as well as ZAR 223.7 million in the prior period.
I think what's very important is when you go to our cash flow statement, you're gonna see that that is supported by the cash generated from operations. When we get to our average cost of debt, right-hand side to the top or middle to the top, we talk about our average cost of debt. Our cost of debt decreased from the 8.2% that we had in 2021 to 7.4% that we have now. It is driven mainly by the low interest rate environment that we had following the COVID period in the last two years. We are seeing now that our interest rate environment is starting to increase gradually over the period.
I'll talk later about what we have in terms of our fixed debt on our balance sheet, so that you can have a sense of what of that is then secured by fixed debt. When we get to our interest cover ratio, it goes into our ability to cover our interest cost, and it's still at 1.9x from 2021. Yes, our covenant is two times, and we would definitely wanna be on that two times, and we're working hard to get ourselves to that two times level. We are targeting a far higher interest cover ratio in the future, which is in excess of two times.
When we go to our financial overview, the few points I wanna highlight on this slide in particular is, our rental income and net property income, which excludes straight-line adjustments, both decreased by 4%. The major driver for both of them is what Siya already touched on in his portion of the presentation in terms of the Polokwane portfolio that reverted quite significantly. The reason for the significant reversion on those is we previously did have 10-year leases in place for Polokwane, which has been now replaced again with a 9-11-year and a five-year lease. The market-related rentals that we have achieved is 130 and 135 rand respectively. Our finance cost decreased from ZAR 413 million to ZAR 388 million for the year, which is 6.1%.
I said earlier, that is our, mainly our interest rate environment and the fact that we have settled ZAR 210 million towards our debt. I'm gonna touch on our cost-to-income ratio. It is significantly higher than what we had in the prior period. Current year, we've got 48% on a growth method, while on a net method we had 38%. The main driver is when you have a look at the bullet point right at the bottom. It is because of our high vacancy level that we have, as well as the fact that rates and taxes are not recovered from our largest tenant, which is our sovereign tenant.
That is then putting us in a slightly different position than most other counterparts in the sector, but I think it's worthwhile just explaining that. As Siya was saying, as we work harder in getting our vacancies let, that number will start coming down. When we talk about Grit, and I'll unpack it a bit more when we get to the financial position, but our investment in Grit came down from ZAR 157 million to ZAR 110 million. As you are aware, we hold the shares in Grit on the Stock Exchange of Mauritius, the SEM, and not on the London Stock Exchange. When we get to our REIT net asset value, that decreased ZAR 4.70 or ended with ZAR 4.76 from ZAR 5.06.
We're at a ZAR 0.30 reduction in that. It goes hand in hand with our loan-to-value, which the main driver is our investment property devaluation, then offset slightly with our repayment of debt. I'd like to touch on our fixed versus floating. We have 40.9% as fixed debt, and the period for that fixed debt is 1.7 years that we still have left. It has reduced from the 2.7 in the prior period, and it is because we have not taken any new swaps, because we are partly looking as to what the portfolio would look like post our disposals. When we move on to our next slide, our statement of profit and loss and other comprehensive income. I have already.
I think the one point I would like you to focus on this is that we have moved from a net loss of ZAR 456.1 million to ZAR 149 million for the year. It is still a loss, and we do acknowledge that, but I think it's a significant reduction in that number. The drivers in that goes again back to our rental income that reduced, our property operating expenses that slightly increased and getting us to a net 4% at the end of the day. Dividend income was less. The Grit only declared a dividend towards the end of our financial year and not early in that financial year. Again, our administration expenses found itself to find a stable level at where we are now at ZAR 97 million for the year.
Our biggest reason for our loss to be created of -ZAR 149 million is the fair value adjustment, and that goes into three areas. It is derivatives, which had a positive impact on our fair value adjustments. We had the investment property valuations that had a negative impact, as well as the Grit fair value adjustment that we had. When we go into the Grit fair value adjustment, we talk about them having $0.70 in the prior period to $0.48 in the current period. That was slightly offset then with a rand/dollar exchange rate moving from 14.54 to 15.55. Therefore, we've seen quite a significant downturn in the Grit investment.
Hence the Grit investment for us is certainly an investment that we want to dispose of, that is not core for us. When we get to our finance cost, we spoke about that. It came down significantly in totality with both interest income and cost to 6.1% for the year. One of our further biggest drivers in our statement of profit and loss is that our tax expense went from ZAR 152 million in the prior year to only ZAR 81 million in this year. It is still a rather large number and contributes then to the negative ZAR 149 million.
The main driver for bringing that tax expense down is that we have cleaned out our balance sheet in terms of reversing provisions and actually writing off some of these old arrears, and we'll touch on that now. In our next slide, we talk about our distributable earnings statement, which is the SA REIT FFO statement . I think what's important for me to point out on this slide is basically right at the bottom where we do talk about the ZAR 263 million distributable earnings compared to ZAR 223 million of the prior year. Again, as I said, when we go to our cash flow statement, that is underpinned by strong cash flow almost to equal amount in terms of what we had for current year and prior year.
When we look then at the number, which is ZAR 0.3691 per share compared to the ZAR 0.3133 per share, it does show a 17.8% increase, an amount that we are very proud of because this shows you the underlying income statement that we are working with and the performance of the underlying assets. When we move to our next slide. Again, this is a graphical representation that actually shows you the up and down of what is making the changes in our funds from operations, which is the distributable income statement. The most notable of that, as we've split out the reduction in the bad debt provision from the actual write-offs, and you'll see that we wrote off ZAR 2 million more than what the provision is that we reversed.
That gives you the increase and the decrease that you're gonna find. Our tax, apologies, had the impact of ZAR 87 million movement between the two years, which means that that then took our distributable income up. The most notable on the other side is that we had the property expenses and the contractual rental income, which we reverted, that brought down that distributable income statement for us, taking us then to the ZAR 265 million that we have for the year.
When we move to the next slide, which is our financial position, I think the one point I would like to point out here is I am gonna talk about NAV, and we have spoken about our investment in Grit already to a great extent, as well as our investment property and our interest-bearing borrowings. Most notable on our financial position is that we have moved some of our interest-bearing borrowings from current to non-current, and that was with the extension with our facilities with Standard Bank. We've signed a three-year facility with them, and it splits into two tranches. The one tranche being an interest-bearing interest only with a bullet at the end, whereas the other one is an amortizing facility. The amortizing facility being a smaller facility than the interest-only facility.
When we talk about the other interest-bearing borrowings that are current at this point in time, we are negotiating at the moment with both Investec and Nedbank to extend our facilities for longer term, but I'll talk about that a bit more in the next slides that follow. What I do wanna point out is when we look at our current assets of ZAR 354 million, including that is our arrears. Our arrears came down with approximately 17% net when we take the write-off, the bad debt write-offs into consideration as well. It goes hand in hand with what we already spoke about with our strong collections that we had for the year of 112%.
When we talk NAV, in particular, we're talking that our NAV came down from ZAR 5.06- ZAR 4.75-ZAR 4.76. But also I think we need to just point out that yes, we are trading at a rather large discount to NAV. Our share price for the end of February was ZAR 0.60, whereas our share price for the year prior to that was ZAR 0.35. I think we clawed back significant value in terms of the share price, although it is still low numbers that we're talking about. I think it's an important point that we make that. When we then go to our next slide, important is to point out that we have a panel of six independent valuers.
We had the same valuers last year than what we had this year. We do rotate our portfolio on a continuous basis with our valuers in order to make sure that we have that independence remains in place and that we have our valuations are looked at very carefully. Our valuations, as we earlier indicated, came down from ZAR 8.2 billion- ZAR 7.9 billion. It doesn't seem to be a rather large number, but I think for us, it's still a large number, and we are working hard on getting that corrected going forward. CapEx goes to that extent as well as then, you know, and some, as Siya said earlier, some of these things are impact from external factors as well as internal factors. Internal factors being the fact that we have large vacancies.
External factors is that we have large vacancies, as well as the fact that the slow economy and then the market-related rentals that we find in the market. I think that deals then with our valuations and that we're working hard on actually looking to extend our leases, and that will certainly assist us in getting our valuations going in the right direction. Our next slide on our debt funding. Just to touch on that in particular is yes, we have renewed our facility with Standard Bank for three years, as I just said. Nedbank and Investec. Nedbank is our largest funder with approximately ZAR 2.6 billion on the balance sheet. With them, we are renewing on a shorter-term basis. However, we are trying to get our facilities for a longer term.
We are working close together, and I must say with all our funders, we really have a very, very good relationship and are truly supportive of Delta Property Fund. Bank of China and State Bank of India, we have both of them agreed extensions until December 2026. There's one portion of the Bank of China facility, which is part of a syndicated facility with Nedbank. We are engaging at this point in time debt advisors in order to assist us to increase the pool of funders that we have, because we wanna be a bit diversified when it comes to our tenant base, we also need diversification in terms of our funding.
That goes into our LTV and our LTV important, the two drivers being valuation and being the reduction in our debt, and we are working hard on getting disposals done in order for us to start reducing that debt to a significant level. Correct. I mean, so getting to our debt summary at the end, it does show our extent to which we are funded by our various banks, as indicated. Nedbank, our largest funder, approximately ZAR 2.6 billion, including the State Bank of India and the Bank of China facilities that are syndicated in there, going to ZAR 2.8 billion. Standard Bank being ZAR 805 million, Investec ZAR 735 million.
That takes us to a total of ZAR 4.5 billion, and when we then include our accrued interest and fees, that takes us to ZAR 4.545 billion. 40.9% of that is hedged, so therefore we have ZAR 1.86 billion in fixed contracts, and it's mainly fixed versus a three-month driver. It also then takes us to a weighted average interest rate of 7.4%. When I go to our LTV bridge. Now, the LTV bridge, as well as our NAV bridge, is gonna talk hand in hand to one another. LTV, the main driver is we started with a 56.5%. We had a devaluation on both the Grit shares as well as the properties, but a revaluation or positive revaluation on the derivatives.
That's evident in the 2.9% and the 0.3% that you're gonna see in the blue blocks. Our major downward move in terms of LTV is that our CapEx that we spent, and it's because it was revalued out together with the amortization of the debt that basically then brought the total LTV down to 57%. If I can touch on our next slide, which is our NAV, the share bridge. Again, you're gonna find the same culprits responsible for the NAV to change in the same way that we have found our LTV changing.
In the same instance here, we have going from ZAR 5.06- ZAR 4.75, and it is because we have the major driver of taking NAV up is the fact that we repaid debt and our reduction in our tax liability. The main drivers, again, bringing it down is the revaluation of the properties as well as our Grit shares on the balance sheet and working capital changes that we find taking us then down to ZAR 4.75. I think before I go on to conclusion, just one point we also would like to touch on is the fact that we would like to thank BDO for the 12 years that they were part of our life in terms of being our partner for our audit partner.
You would have seen yesterday that we have released the SENS announcement announcing the appointment of KPMG as our audit partner. We are very proud of being able to be associated with KPMG going forward and I can assure you that the board as well as the audit and risk committee went through a robust process in terms of making sure that we appoint the correct partner for Delta going forward. Thank you, Siya. I hand back to you.
Okay. Great. Thank you very much, Marelise. In conclusion, Delta's 10-year milestone as a JSE-listed REIT in 2022, which is this year, provides us with an opportunity to reflect on the journey traveled, as I indicated earlier. This journey has certainly not been smooth, but there's a lot to celebrate. There's a lot to build from. Macroeconomic headwinds remain a challenge. A strategic plan to navigate these tricky terrains is in place. In order to succeed, we need to be agile. We need to be able to adapt when required. Delta's greatest asset is its people. Our people remain at the center of the business and are motivated. We are ready to chart a new path to a greater and brighter future for all stakeholders while delivering quality assets for our tenants and superior returns for our investors.
We therefore invite you to come along with us on this journey. We encourage you to invest and continue to invest in Delta and take Delta to newer heights. Thank you very much. We will now take some questions, so I will hand over to Monet. Monet, if you can moderate the questions, please. Thank you very much.
Thanks. Thank you very much, Siya. Before we take questions, ladies and gentlemen, please note that you may post your questions by clicking on the Questions tab at the top left-hand side of your screen, just under the Delta logo. Would you like to do a short interval before we go to questions?
Yes, please. Yeah.
Thank you very much.
Thanks.
We'll be back in five minutes, ladies and gentlemen. We will be doing the Q&A. Thank you.
Thanks. Okay.
Ladies and gentlemen, welcome back, and thank you very much for your patience and joining us for the Q&A. The first question is from Jaco Smith. He's asking: When will dividends continue? What is being done to drive the share price closer to net asset value? Most other REITs companies are trading at around 50%-60% of net asset value.
Okay, I think I will answer this one. I think, you know, firstly, just to confirm that we are not declaring a dividend. Declaring a dividend will depend on how successful we are in terms of our turnaround strategy. I would like to emphasize that it certainly is our goal to declare dividends as soon as possible. With regards to the second part of the question, which was the NAV and the price at which we are currently trading, we obviously cannot control the price at which we are currently trading. I think what we can do is we can share our vision with the market, we can share the strategy with the market, and we can, you know, communicate how we are doing as we progress along the way. It is for the market to then respond accordingly.
We are obviously working, and we've developed the strategy in such a manner that we want to see the share price improving. It's not something that we can control. Thank you.
Mr. Virgil France is asking whether you've considered a share buyback.
Thank you, Monet. I'll take that. Yes. When we look at a share buyback, I think it goes hand in hand with our NAV. When we look at our NAV, the previous question is how do we improve the NAV? The improvement of NAV will come with revaluation of our portfolio upwards, as well as with a reduction in debt. We are targeting both those pillars going forward, and I think it then goes hand in hand with the share buyback. When will we buy back? It's once there's excess cash after we've reached our targets in terms of LTV and NAV, then that's something that we can consider if there's excess cash.
Thank you, Marelise. Mr. Tseposo Fetlelo is asking, commentators have often said that the commercial property sector will not return to pre-COVID levels anytime soon, if ever. Does your optimization pillar sufficiently respond to this trend?
Thank you very much for the question. Yes, we are very confident that this pillar takes this into account. I just want to remind you the various aspects that are included in this pillar. The first is disposals. Now, disposals are permanent. It means that we lose those buildings forever. It allows us to focus on the tenants, the geographical areas, and even the sub-sectors that we believe are the right ones for Delta and its stakeholders going forward. Yes, conversions are also permanent because it's about repurposing the assets from being used for a particular use to a different use. I also want to emphasize the importance of having a sovereign underpinned portfolio such as ours.
We have seen that we have managed to go through really tough times during COVID-19, and the fact that we had a sovereign underpinned portfolio, even though our vacancies were as high as they were, has allowed us to get through and succeed in the process. That part, it is for that reason that we want to still keep at least 50% of the portfolio as being sovereign underpinned going forward. We need to basically have a bit of a balance of both. Yes, this does take this into account and of course, I think COVID-19 has changed the world of work. It has changed offices. What was not going to change is that government will still continue to be there, and government needs to be client-facing, and government needs to have offices. That aspect is still important.
It's about making sure that we have a bit of a balance between those two. Thank you very much.
Thank you. Here's a follow-up question from Mr. France: Could the Bank of China borrowings be increased since they offer the lowest interest rate?
Thank you, Mr. France. We are looking at all possible funders going forward. I think at this point in time, I'm not so sure that Bank of China have further capacity necessarily to take up further debt. That is something that we are looking at.
Thank you, Marelise. Mr. Paul, Paulo de Almeida from Clearance Capital is asking a couple of questions. How much CapEx do you anticipate spending over the coming year? Would it be similar to the amount you spent this year? What proportion of the portfolio is externally valued at year-end? Was it one-third?
Thank you. I'll take that question. On the CapEx answer there, we had earmarked ZAR 183 million for CapEx in the prior year. Following from that, we still have. We have spent ZAR 112.8 million. There certainly is still amounts that we are carrying forward from then in order for us to execute on and complete on. That will deal with the question in terms of CapEx. On the external valuations, our policy is to value a third full valuations every year. Just to be clear on that means a third of the portfolio gets full valuations, whereas two-thirds of the portfolio get desktop valuations. All of them are still all independently valued by experts externally to Delta.
Thank you, Marelise. Mr. Jaco Smith is asking, Will Delta not risk losing its REIT status for not declaring dividends for two consecutive financial years?
Thank you, Jaco. I think our REIT status is very important to us, and we consider our REIT status at every possible juncture when we are reporting to our governance structures, being our audit and risk and our board. When we consider that, we are required to consider not just the dividend payment that will happen, but also the solvency and liquidity of the fund post that payment. When we do that consideration, in terms of Section 46 of the Companies Act, we have to make sure that post the dividend payment, that we will still be solvent and liquid. Taking into consideration the CapEx that's required for this fund, as well as the tenant installations and the amortizations that need to be paid to the funders.
At this point in time, it will not leave us insolvent entity after paying a dividend, knowing that we have other liabilities to take care of. At this point in time, yes, we believe that our REIT status is intact, but we are very careful about that because we do value our REIT status.
Thank you, Marelise. Mr. Zola Lupondwana is asking: with the new leases that were renegotiated post year-end, what is your adjusted vacancy rate at, say, end of April?
The month-to-month leases, those being converted into longer term leases, does not have an impact on vacancies. We would have included that calculation as part of our existing occupancies, so there won't be any change due to that.
Thank you, Siya. Looks like the final question from Mr. Andrew Russell of African Equity. He's asking: how specifically have you gone to market with respect to disposals and conversions?
Well, we actually have gone out to market with regards to this. We have engaged various brokers who are out there talking to various potential buyers with regards to this. As I indicated earlier, we are looking at fast-tracking this. We are busy with deals valued at approximately ZAR 300 million at this stage. However, we are looking at fast-tracking this, and we will be able to report further between now and the next time we report on our results, which are interim results for the first six months. I can assure you that we are fast-tracking the disposals. Thank you.
Siya, if I can maybe just add to that. You know, we are quite far down the line in some of our negotiations with our disposals, and that you will definitely see announcements with regard to disposals.
Yeah. Absolutely. Thanks.
Thank you. A follow-up from Paulo de Almeida. He's asking: in terms of the debt extensions, will more of it be on an amortizing basis?
At this point in time. Thank you, Monet. At this point in time, yes, it will still be on an amortization basis. What we are doing is that, you know, I think we've come a long way from where we were when we took over a while ago. You know, at that point in time, we had month-to-month extensions. We then moved to four-month extensions, and hopefully moving now to the six-month extension mark. It's still not where we want to be, but it certainly is a change in the right direction. I mean, with Standard Bank, we've already signed a three-year extension and renewal. Yes, it will definitely take us in the right direction.
Fantastic. There were no further questions from the floor.
Thank you so much.
Thank you.
Thank you for your participation.
Yeah. Well, I think that brings us to the end of our presentation this morning. We would like to thank everyone for being patient and waiting until we could start. We would like to thank you once again for listening to us and for posing your questions, and look forward to further engagements going forward. Thank you very much for your attendance.