L2D Pre-close operational update_May 2020.pdf [downloads]
Archives for May 2020
Deloitte SA, one of the country’s leading professional services firms, will resume occupancy of its new African headquarters, co-developed by leading property developer and investor Atterbury and JSE listed – Attacq Limited, once SA’s novel coronavirus (COVID-19) lockdown is over. Some 3,500 staff members will work from the building, but the premises have room to accommodate almost 5,000 people in time. This provides Deloitte with additional workspace flexibility, which is especially relevant in a time that calls for workplace facilitation of social distancing protocols.
The ultra-modern property is located in the sought-after Waterfall Precinct, which is well known for its easy accessibility, world-class infrastructure and central location between Sandton and Pretoria. The new building currently consolidates Deloitte’s two former Gauteng offices – Woodmead and Pretoria – into one attractive, modern building with 42,500m² of quality workspace.
The new HQ was designed with the future in mind, with smart building technology and interactivity integrated throughout, making it responsive and adaptable to the needs of the workforce today as well as in 10 or 20 years’ time. The HQ development began in late 2017 and was completed on 31 January 2020. Deloitte’s move into the building was all but concluded when the government announced a nationwide lockdown at the end of March 2020.
Mike Jarvis, chief operating officer at Deloitte Africa, says, “We are looking forward to working from our new offices when it is deemed safe to do so. The new building promises improved efficiency, integration and sustainability for the firm’s Africa headquarters. This is good for our business, our people, our clients, and the environment. The benefit of developing office premises with the ability to expand means that it is suited to our long-term capacity needs – and potentially the short-term, post-COVID distancing protocols too.”
James Ehlers, managing director of Atterbury Property Developments, says, “We’re thrilled to have created a new home for Deloitte. The new building supports the functioning of the organisation and its people in a welcoming, modern workspace. This project is an achievement of which everyone involved can be incredibly proud.”
Atterbury, the leading South African property developer and investor, has more than 25 years in property development, investment, and asset management in South Africa and internationally. It has established a proven track record of delivering excellent tailor-made development solutions.
Atterbury’s development manager, Arno du Plessis, says, “We prioritised overall efficiency and savings in developing the new user-friendly headquarters for Deloitte’s clients and employees. The building’s operational, environmental and cost efficiency is integrated across its ground floor, six offices levels and four basement parking levels with almost 2,000 parking bays.”
Waterfall City has cemented its place as the top business node for South Africa’s leading companies. The precinct is known for its world-class, LEED (Leadership in Energy and Environmental Design) certified buildings, and Deloitte’s new headquarters, designed by innovative commercial architecture practice Aevitas, have been awarded a LEED Silver rating for its positive environmental impacts. The new head office’s energy performance goes well beyond the minimum standard required to reduce environmental and economic effects. It includes solar panels, backup power, enhanced ventilation, rainwater harvesting and storage, and indigenous landscaping.
Enzo Oosthuizen, Attacq’s Development Manager, adds, “The building’s unique racetrack design and large internal atrium promote integration and connectedness among staff, while making the building amenable to future subdivisions, should the need arise. With its spatial layout, sustainable design features and impeccably planned links that tie into the precinct’s walkability, the new Deloitte HQ perfectly fits in the Waterfall precinct.”
Waterfall’s access to quality infrastructure and other amenities such as health care services, schools, retail offering and fitness facilities makes it the ideal location for companies prioritising work-life integration. The flagship Deloitte building is located on a prime position facing the N1 highway, just off the Allandale interchange, with close proximity to public transport systems. The building itself features cyclist facilities and preferential parking for ‘green’ vehicles. The choice of location by Deloitte affirms that the vision for Waterfall City resonates with blue-chip companies in SA.
“Over the past few years, we have been deliberate in our efforts to create an urban live-work-play environment within Waterfall City. Key to this is offering a unique mix of office, hotel, light industrial and residential solutions that promote safe and sustainable spaces where people can connect. We are thrilled to welcome Deloitte to Waterfall City; they are yet another example of the confidence that major firms have in expanding their operations within our precinct and speak to the quality of our corporate consolidation proposition,” says Melt Hamman, CEO of Attacq.
The new Deloitte HQ was developed as a 50/50 joint venture between co-owners Atterbury and JSE-listed Attacq Limited.
Growthpoint Properties has completed the R185m first-phase of its new industrial park development on KwaZulu-Natal’s major logistics and transport corridor.
Growthpoint Industrial Park has received keen market interest and its first tenants are already operating from the 20,300sqm initial phase of the development.
Located at 52 Siphosethu Road on a prime 66,558sqm site that is precisely midway between Durban harbour and King Shaka International Airport, Growthpoint’s latest industrial address offers superb access to eThekwini’s new C3 Corridor linking Pinetown to Mount Edgecombe. It is at the confluence of several major transport arterials with quick access to the R102 and N2 freeways and N41, with excellent visibility and accessibility for logistics, staff and public transport.
“Mount Edgecombe is quickly becoming an established logistics node. Its popularity is being driven by the new C3 Corridor road infrastructure in response to the lack of new industrial land around the busy Durban harbour,” explains Rudolf Pienaar, Growthpoint’s Chief Development and Investment Officer. “While it already caters for large-scale warehousing on the one hand and mini-units on the other, we identified a gap in the market to develop midi-and maxi-units. Growthpoint’s skilled development team has met this need with a first-class industrial park designed especially for businesses that rely on excellent transport access.”
The first of the development’s two phases includes 15 midi-units of between 846sqm and 2,065sqm. Growthpoint Industrial Park’s second phase will add some larger units to the mix.
“We understand that businesses today are all about efficiency, and we’ve developed a business park that really supports this. It offers quality space at affordable rentals, and is a premium product in its market,” says Growthpoint’s KwaZulu-Natal Regional Development Manager Kobus Blom.
Units are crafted to be infinitely flexible, allowing businesses to be agile and grow, shift and change swiftly. For instance, there are five-metre-high roller-shutter doors linking warehouses, enabling instant expansion possibilities.
Some 13% of each unit’s floor space is dedicated to air-conditioned offices. An appealing design language creates good synergies throughout the building, from the lobby and offices to the warehouse. However, it is possible to add more office space, with each unit offering the expansion potential of a mezzanine block with stacking space below.
The warehouse spaces are designed to create a pleasant environment for the people using them, with a kitchenette, canteen and ablutions. They feature laser-level surface floors which comply with free movement FM2 specifications. Each unit offers eight-metre eves height that could accommodate a racking system as well as standard in-rack sprinkler protection, which would meet basic safety requirements.
Energy efficiency is at the core of the development. Motion-sensing warehouse lights can be set to 50% or 100% and change with the quality of outdoor light which streams into the bright, airy buildings through the clever use of translucent polycarbonate sheeting
Electrified perimeter fencing, controlled access and CCTV are among the security measures at this fully gated and monitored park. It also has ample electricity supply and a full fibre optic ring network.
The park’s easy truck access is enhanced by shared central super-link reticulation. Separate from the main yard, parking for staff and visitors is available at each unit.
“Growthpoint is a significant property owner in the Mount Edgecombe area. Based on our experience of property performance at this strategic position, we’re pleased to add Growthpoint Industrial Park as a long-term asset to our diversified industrial property portfolio,” notes Errol Taylor, Head of Asset Management: Industrial at Growthpoint.
Growthpoint creates space to thrive with innovative and sustainable property solutions. It is South Africa’s largest primary JSE-listed REIT with assets of nearly R126bn, including a 50% holding in Cape Town’s iconic V&A Waterfront. Growthpoint is invested in real estate and communities across three continents including Africa, Europe and Australia.
Johannesburg, 19 May 2020 – Growthpoint Properties Group Chief Executive Officer, South Africa Chief Executive Officer and Group Financial Director have all personally pledged one-third of their salaries for three months to the Solidarity Fund to assist in curbing the CO VID-19 pandemic in South Africa.
The Chairman of Growthpoint and several non-executive directors are also donating a third of their quarterly board meeting fees to the Solidarity Fund.
The pledge responds to President Cyril Ramaphosa’s appeal to the country to donate to the Solidarity Fund and the JSE’s appeal for listed companies to heed the call.
Norbert Sasse, Group CEO of Growthpoint, says, “At this definitive moment in South Africa’s history, we are committed to supporting the national efforts to limit the impacts of COVID-19. The Solidarity Fund is a powerful example of the generosity, compassion and patriotism shown by South Africans in this time of crisis. I am incredibly proud that everyone at Growthpoint has stepped up at this truly ‘Thuma Mina’ moment.”
The Solidarity Fund is an independently administered vehicle to help government and civil society to fund the response to the COVID-19 crisis in South Africa. It is a consolidated effort to detect and prevent the spread of the coronavirus, care for those in hospital or medical care by ensuring a supply of personal protective equipment (PPE) and feeding and sheltering those who have been left vulnerable by the pandemic.
The Solidarity Fund contributions are not where Growthpoint’s efforts stop. Their corporate response to supporting those who are severely affected by the Covid-19 lockdown put R200 million in rental back into the pockets of profoundly impacted businesses in April and May to sustain them through the lockdown. This number includes 1,494 small and micro retailers. The rental relief has directly protected the jobs of those working for recipients.
All Growthpoint suppliers also continue to be paid in full, regardless of the capacity of their service, to ensure that they can pay their staff.
To minimise the risk of spreading the virus within Growthpoint’s operations, it has imposed strict measures to protect its employees. It has invested extensively in safety and sanitation at its many properties, including shopping centres across the country which support essential retail, to safeguard the well-being of millions of South Africans.
“The pandemic has had a significant impact on all sectors of society, including the property sector,” says Sasse. “Never before has it been more important for all South Africans to stand together and each do our part in the fight to limit the impacts of COVID-19. We believe it is imperative to sustain lives, jobs, communities and businesses so that we can emerge to rebuild our nation and economy.”
Growthpoint also continues to support its corporate social responsibility (CSR) partners, most focused on education in previously disadvantaged communities countrywide, to ensure that these charities and initiatives can rise to the new challenges they face. Where some of their operations are proving to be impossible, Growthpoint is supporting the diversion of finances into technology that enables video streaming, WhatsApp conversations and information sharing, to support these organisations to achieve their ongoing objectives in new ways.
Growthpoint’s CSR during the lockdown includes:
- CHRISTEL HOUSE: Using a life-transforming educational model, Christel House educates, feeds and provides health care for disadvantage children from early childhood through to early adulthood. The 30 students supported by Growthpoint started Christel House’s remote learning curriculum on 1 April. All high school students now have tablets loaded with a SIM card and are receiving weekly data bundles to allow for online video streaming sessions. Learners were given food and sanitary hampers on their last day. More are being delivered at month-end using the school’s buses. Counsellors and social workers continue to counsel students and families telephonically. While persisting through the crisis, Christel House is breaking ground for new and innovative ways of educating and supporting students in future.
- PROTEC: This programme assists to prepare school learners for Maths, Science and Technology and Engineering (STEM) careers. The 40 learners supported by Growthpoint with maths and science tutoring sessions usually held every Saturday and during holidays have been given worksheets via WhatsApp and email, where they also receive tutor assistance, to keep up with the education plan.
- EDUCATION AFRICA: Dedicated to poverty alleviation through education, several of its initiatives have been able to continue throughout the lockdown, such as its UNISA programme in Business Focus Management, which is run on an ICT platform with added support for students on Zoom and WhatsApp. Growthpoint provides Education Africa with offices.
- BOTSHABELO: Botshabelo helps orphaned children, underprivileged pre-schoolers and women through their children’s homes, preschools and teacher training centres. Teachers have been provided with training modules which they can work on and are still receiving their stipends to assist them in providing for their families. They have also been given access to technology for WhatsApp and online meetings to check on learner progress and engage.
- NTATAISE LOWVELD NPC: Ntataise teaches and supports ECD practitioners to stimulate rural and underprivileged children. Stipends for the practitioners who are being trained are diligently being paid during the lockdown, and they have been connected with WhatsApp to communicate.
- GENISIS SAFE PLACE: The ongoing support for this safe place for victims of injustice, abuse and violence has kept its doors open at this time of real need. The NPO has also started providing water in rural/informal settlements and delivering food parcels to households living below the breadline such as child-headed homes.
- RISE AGAINST HUNGER: Since 23 March, Rise Against Hunger has distributed over 650 000 meals. It is also preparing for an increase in demand for meals once schools and universities return. Ensuring more people can earn during the lockdown while helping to feed the hungry, Growthpoint employed casual workers to safely pack meal parcels for Rise Against Hunger in two warehouses, in Joburg and Cape Town. Besides being paid fair wages, the casual employees receive a meal on the days they work.
- PROPERTY POINT: With 250 SMME businesses in Growthpoint’s enterprise development network, Property Point has stepped up to advocate for entrepreneurs to garner urgent support, as well as to continue to inform, equip and inspire small businesses throughout this time. It engaged these businesses before the lockdown and identified their pressing needs. Programme managers, who manage relationships with the beneficiaries, are continually engaging the businesses with regular check-ins, sharing information on how to apply to the various relief funds, facilitating legal consultations to navigate contractual issues, offering individual coaching sessions, and providing a promotional platform with Entrepreneurship To The Point, eTTP #InConversation sessions via Zoom. Property Point is tirelessly working to ensure that the businesses on the programme are well taken care of, and that we walk alongside them into this unknown.
Growthpoint creates space to thrive with innovative and sustainable property solutions. It is South Africa’s largest primary JSE-listed REIT and is invested in real estate and communities across three continents including Africa, Europe and Australia.
Growthpoint Properties has developed the first building on the African continent to achieve a WELL certification, further differentiating its workspaces and taking its portfolio of office properties to the next level.
The Growthpoint-developed Exxaro headquarters in Pretoria, an 18,500sqm office building opposite the Centurion Gautrain Station, is the very first building in Africa to be awarded a WELL certification. It received a Silver Level WELL Core and Shell Certification by the US-based International WELL Building Institute (IWBI).
The close collaboration between Growthpoint, Exxaro and the development’s entire professional team crafted this innovative, green, aesthetically compelling, high-performance building.
Because people spend 90% of their time indoors, there is no doubt that our built environment has a big impact on our health, well-being and productivity.
The WELL Building Standard is the first global rating system to focus exclusively on how buildings, and everything in them, can enhance our health and wellness. WELL was developed by integrating scientific and medical research with leading property expertise.
The global WELL portfolio includes more than 4,000 projects in 61 countries. With Growthpoint’s ground-breaking WELL certification, South Africa has become part of the leading community of nations with buildings that put the well-being of people first. Pretoria is now the home of one of only 300 WELL certified buildings worldwide.
“Receiving Africa’s first WELL certification is another proud milestone on our journey to provide work environments that contribute to the positive health, well-being, safety and performance of the people and businesses in our buildings, contributing to both human and environmental sustainability,” says Rudolf Pienaar, Growthpoint’s Chief Development and Investment Officer.
Growthpoint is already an established leader in green developments. It owns the biggest portfolio of green-certified buildings in Africa, providing quality spaces that work best for its clients.
With Growthpoint’s commitment to innovative and sustainable property solutions that provide space to thrive, it identified the opportunity to push the boundaries of building design in South Africa yet again by aiming for a WELL Certification. Exxaro’s head office development provided the ideal starting point for Growthpoint to create a model of sustainability and well-being for its occupants.
“For some time now, we have been integrating design innovation and sustainability to create positive places for people and businesses. When your people perform at their best, your business does too. With our experience using the WELL Building Standard, Growthpoint has proven it can deliver healthy buildings for the future which help companies implement proven wellness strategies and performance,” notes Pienaar.
“With the COVID-19 crisis, there will be increased importance placed on the design and operation of buildings for occupant health and well-being. Our experience will prove to be an invaluable asset to businesses in South Africa. This crisis has clarified the urgent need for work environments that have a positive impact on physical and mental health, and workplaces that protect our families, businesses, communities and the public. Human health factors, such as good ventilation and air quality, are going to be the defining feature of Premium-grade office properties in future.”
In line with both Exxaro’s and Growthpoint’s high environmental standards, the design for the leading-edge HQ development initially targeted a 5 Green Star rating from the Green Building Council South Africa.
Working with IWBI and with input from the entire professional team – including Aurecon, AECOM and AMA Architects – Growthpoint navigated the complexity of aligning the building’s design with the requirements of both the Green Star rating system and the WELL Building Standard.
The WELL certification scheme is performance-based with targeted criteria in the categories of air, water, nourishment, light, fitness, comfort and mind. The development had to meet 26 preconditions for WELL Certification, and because it was designed for a high Green Star rating, many of these were already in place.
“The two certifications proved to be complementary, even though one focuses on the environment and the other on people,” explains Pienaar. “Professional team collaboration ensured that the building achieved both its WELL Certification and 5 Green Star rating for design. Its ‘As Built’ Green Star rating application is currently in progress.”
While occupied by Exxaro, the signature building is owned by Growthpoint. Pienaar points out, “Growthpoint has assembled an office portfolio of quality, efficient, sustainable, high-performance workplaces, and we are thrilled that it now includes the first WELL-rated building on the African continent. This asset signifies the calibre of office building that we target for our portfolio. It is the type of workspace that we believe our clients are going to want to safeguard and enhance their employees’ health and well-being and their business performance.”
“Spear has delivered distribution growth of 6.06% in one of the toughest trading environments experienced in decades. South Africa finds itself in very uncertain times with low levels of economic growth and the advent of the Covid-19 global pandemic. As the operating conditions present numerous headwinds, the strong performance of the core portfolio is testament to the quality of Spear’s portfolio and its ability to generate income growth for its shareholders. Delivering these types of results would not have been possible without its strategy of being hands-on managers of its assets, its regional focus and having excellent proximity to its assets” – CEO Quintin Rossi
Financial highlights for the full year ended 29 February 2020:
- Full year dividend declared of 91.66 cents per share
- Distribution grow per share of 6.06%
- TNAV per share increased to R 12.17 per share
- 9.78% increase in asset value
- Portfolio fair value R 4.18 billion
- Loan to value 39%
- Portfolio occupancy 97%
- Fixed debt ratio 63%
- Positive rental reversions of 1.95% for the full year
Cape Town, 14 May 2020: Spear REIT Limited (SEA:SJ), the only regionally specialised Real Estate Investment Trust (REIT) listed on the JSE, reported its annual financial results today, posting 6.06% earnings growth amidst some of the toughest trading environments in recent years for the South African listed real estate sector.
Spear’s management team led by CEO Quintin Rossi delivered on both their mission statement which is “to be the leading Western Cape focused REIT growing its distribution per share ahead of inflation annually to its shareholders” as well as their distribution growth forecasts for the 2020 financial year. Spear’s management team equipped with its unique industry knowledge and regional know how were able to maintain a 97% tenant retention rate across the 436 436m2 diversified portfolio. Spear’s regional focus, tenant centric approach and product mix has been the catalyst for the results achieved.
The average property value has increased to R130 million compared to the previous reporting period of R127 million. Spear began the financial period with an opening vacancy of 7 992m2 and with 113 551m2 expiring during the year. Management has successfully renewed and re-let 121 018m2 at a positive reversion of 1.95%
Spear’s Covid-19 response
Spear has implemented all required health & safety measures across its business and portfolio to best safeguard staff, tenants and service providers
Rental collections have continued, be it at a slower rate as the hard lockdown instituted by the South African Government on 26 March 2020 set in. Spear has reported the following FY2021 year to date rental collection profile:
98% of March 2020 rental collected
92% of April 2020 rental collected
64% of May to date rental collected
Management remains optimistic that it can maintain its collection momentum for the remainder of FY2021 (in the absence of any significant tenant failure) as it moved swiftly with lease restructures, temporary cashflow relief and rental deferments for those tenants in severe distress. Management however stressed that it is furthermore imperative for lockdown levels to be relaxed as soon as possible to between level 3 and level 2 as this will re-open vast portions of the economy and allow many more tenants to recommence operations.
It is difficult to predict the progression of Covid-19 globally, the residual risks when the lockdowns are lifted, and by extension the economic outcomes of the virus on the real estate sector and on Spear.
The hospitality portfolio has been most severely impacted YTD as a result of Covid-19 and associated lockdowns. We have not forecasted any hospitality income for FY2021.
Spear remains well capitalised with sufficient liquidity and head room facilities circa R 180m – R200m cash availability post FY2020 final dividend. Ongoing stress tests are conducted as we move through each month of the year to plan for potential but unlikely scenarios during this very volatile time.
Spear will not be issuing any FY2021 distribution guidance. Management will provide regular updates to the market from November 2020 onwards regarding income recoveries, hospitality recovery, retail sector recovery and any disposal of non-core assets.
Rossi concludes that the outlook for the year ahead is largely uncertain as the impact of Covid-19 on our business, economy and citizens remain only partially visible right now. What is certain for our business, however, is that the only way out of this Covid-19 crisis is through it. We will get to the other side operational and on form – our fighting spirit has never been stronger.