The JSE All Property Index closed at 9 840 last night.
Q3 2024 showed initial signs of a shift in the dynamic between larger shopping centres and smaller shopping centres, according to the latest Clur Shopping Centre Index. While larger shopping centres have grown faster than the smaller centres since September 2021, this trend reversed in September 2024 with super regional and regionals slightly underperforming the pack of small regionals and smaller centres by -0.1%. Small regionals closed Q3 2024 with the highest trading density growth rate of 3.7% y/y followed by super regionals at 2.9% y/y. Super regionals have held the top growth performer position since August 2021 but since July 2024, small regionals have taken the top spot.
Growthpoint Properties says it’s the first quarter post-COVID-19 where its tenants haven’t reduced office space. The REIT posted an investor update for the three months ended September 2024 having concluded leases of 48 269m2 and renewals of 30 039m2, reducing its office portfolio’s vacancies to 14.2% from 15.1% at FY2024. Rent reversions improved from -14.8% to -4%. Its coastal office assets continue to outperform the rest of the portfolio with vacancies in KZN less than 1% and the Western Cape an improved 5.1%.
Activity among main building contractors during Q4 2024 rose to its best level Since Q1 2023 according to the latest FNB/BER Building Confidence Index while business confidence among sub-contractors, architects, and hardware retailers was lower relative to Q3 2024. Sub-contractors are struggling, with the demand for residential solar installations (which boosted the sector through late 2022 and 2023) having fallen dramatically on the back of no loadshedding. While the business mood among hardware retailers has deteriorated, sales fared exceptionally well during the quarter.
The delayed rehabilitation of Lilian Ngoyi Street following the July 2023 gas explosion has impacted Octodec Investments’ bottom line for the financial year ended August 2024. While the REIT’s average collections remained strong, rental income was affected by rental concessions relating to the unrepaired damage. The Group’s vacancies increased, compounded by the knock-on effect and limiting its rental growth to 3.8%. Octodec says that certain retail tenants were unable to trade effectively during the period and it is actively supporting them until the road repairs are completed. The Group’s LTV increased to 39.2% (FY2023: 37.7%) with its Board declaring a final dividend of 65 cps bringing the total dividend for the year to 125 cps.
Hyprop Investments have had a busy four months. Between July and October 2024, the REIT disposed of its Sub-Saharan African portfolio (excl. SA) to Lango Real Estate; welcomed new stores to its shopping centres, some of which were ‘firsts’ for SA while refurbishing and right-sizing where necessary, announced the addition of 5 500m2 GLA to Somerset Mall through Phase 1 of its major development/expansion project scheduled to start later in the financial year, and started planning its green energy wheeling project for Canal Walk and Somerset Mall.
Delta Property Fund ramped up its disposals during H1 FY2025. The REIT sold three assets with a total GLA of 29 759m2 for a gross consideration of R106.2m while two assets with a total GLA of 8 669m2 were sold post period for a gross consideration of R19.3m. A further eleven properties are held for sale with a combined value of R319.1m which are anticipated to transfer before the end of the financial year. Its covenant LTV reduced from 59.4% to 58.5% during the interim period ended 31st August 2024 with its Board resolving not to declare a dividend.
Total income for tourist accommodation increased by 8.6% in September 2024 when compared to September 2023 according to StatsSA. Income from accommodation increased by 13.9% y/y in September 2024, the result of a 3.5% increase in the number of stay unit nights sold and a 10.1% increase in the average income per stay unit night sold. The main contributors to the 13.9% y/y increase in income were hotels (15.9%) and ‘other accommodation’ (12.9%).
Vukile Property Fund says it remains upbeat about SA’s trading environment and it anticipates a strong H2. The REIT reported a 6% increase in its interim cash dividend to 55.2 cps for the six months to 30th September 2024, positioning the Group to meet its full-year guidance of growth in FFO per share of 2% to 4%. Post-period, Vukile accepted the offer to sell its entire 28.8% stake in Lar Espana for €200m, generating a capital profit of some €70m with the proceeds to be deployed into physical assets in well-advanced transactions being evaluated. Vukile’s Madrid-listed subsidiary, Castellana, remains in exclusive discussions to acquire the largest shopping centre in Spain’s Valencia province while also entering Portugal during the period, which has expanded its Iberian investment footprint.
Stefanutti Stocks’ restructuring plan has reflected in its results for the six months ended August 2024. The Group’s earnings per share for total operations recorded a profit of 1.71 cents (August 2023: a loss per share of 1.21 cents) with its headline earnings per share also recording a profit of 13.23 cents (August 2023: a loss per share of 22.41 cents). Its current order book is R8.9bn (restated August 2023: R7.2bn) of which R1.5bn (restated August 2023: R1.9bn) arises from work outside of SA. Its Board elected not to declare a dividend for the period.
