In other news, the JSE All Property Index closed at 9 987 last night.
SA’s building material sector continued to perform during Q2 2024 showing quarter-on-quarter growth of 9.2% according to the latest Afrimat Construction Index (ACI) – and the only indicator (out of 10) that recorded a positive year-on-year trend. Other indicators that performed well on a quarter-on-quarter basis were ‘Volume of Building Materials Produced’, ‘Sales Values of Building Materials’, and ‘Retail Trade Sales – Hardware’. Although the values of ‘Building Plans Passed’ and ‘Buildings Completed’ recovered quarter-on-quarter, the year-on-year changes in these two indicators are still of some concern, having declined by 21% and 20% respectively, according to economist Dr Roelof Botha who compiles the ACI.
Growthpoint’s assets in KZN and Cape Town are performing well with its portfolios in both regions nearing full occupancy. The REIT published its results for the year ended June 2024, reporting a drop in its overall vacancies to 8.7% with its rental renewal growth moving from -12.9% to -6%. The Group’s renewal success increased from 64.9% to 76.3% with its bad debts and arrears reducing dramatically. The Group declared a total dividend per share of 117.1 cps, 10% down from the prior year, based on an 82.5% payout ratio. Its LTV currently sits at 42.3% (FY2023: 40.1%).
Inospace has marked its seventh consecutive year of achieving over 10% like-for-like rent roll growth, with its R3bn portfolio reporting an overall rent roll increase of 12.2% for the quarter ended August 2024 with 7.2% on a like-for-like basis and maintaining a robust cash collection rate of above 95%. The company’s JV with Fortress Real Estate Investments Limited, Inofort, covers 20 industrial parks which has also contributed to its growth including a 17.5% increase in its net operating income, 12% rent roll growth, and occupancy rates of 95.7%. In the past six months alone, Inospace has signed 101 new leases and renewed 525 client contracts.
Attacq Limited reported full year dividend growth of 19% to 69 cps with distributable income per share increasing by 19.9% to 86.2 cps for the year ended June 2024. The REIT’s occupancy rate rose to 92.8% with collection rates remaining high at 100%. Its retail portfolio’s twelve-month weighted average trading density increased by 5.8% with Mall of Africa continuing to surpass expectations. During the reporting period, the Group concluded key deals including the R2.7bn Waterfall City transaction whereby GEPF acquired a 30% stake in Attacq Waterfall Investment Company; it exited its minority investment in MAS PLC, reinvesting the proceeds in the acquisition of the remaining 20% Mall of Africa that it did not own and, it repurchased 5.4m of its shares, an average of R9.35 with its dealmaking extending to a further 25% acquisition in Waterfall Junction of which the Group now owns 50%. Its LTV currently sits at 25.40%.
Construction shortfalls are pushing residential rentals to record highs according to PayProp with data showing that the average rent in SA rose by 4.9% year-on-year in Q2 2024 – the fastest growth recorded since 2017. To add to this issue, confidence in the construction sector is low with many housing projects stalling before completion with levels dropping to just a third of what they were during the 2006 – 2008 property boom and now in line with the depths of the lockdown. During H1 2024, just 9 623 houses, townhouses, and apartments were completed against 12 623 in H1 2023.
