Archives for August 2022

It starts with a meal

As Corporate South Africa, we can no longer ignore the plight of millions of children who go to bed hungry every night across South Africa.

On 16 August, Octodec, with the help of City Property staff, came together at 012central to pack over 129 000 meals for Rise Against Hunger which will feed 500 children with five meals a week for an entire year!

The Covid-19 pandemic halted many in-person CSI initiatives and operations, so we were excited to finally roll up our sleeves and get back to being part of the solution by packing meals with our partners from Rise Against Hunger.

3.1 million children experience chronic hunger daily which has a devastating effect on brain development. 90% of brain development happens before the age of five, and further one in five South African children under the age of six are developmentally delayed.

Beyond the facts and figures regularly used to explain hunger, understanding the full extent of starvation and malnutrition can be daunting. We applaud the work Rise Against Hunger does to end hunger by empowering communities, nourishing lives and responding to emergencies.

For over five years we have been committed to his project, providing almost 630 000 meals in that time.  The meals are highly nutritious and comprise of rice, soya, dehydrated vegetable mix and fortifying minerals and vitamins, specifically formulated to combat malnutrition – and complies with the UNICEF standard. 

As was done in the past, the meals will be distributed to early childhood development centres across Gauteng through the Rise Against Hunger network. This food drive serves as an imperative reminder of what can be accomplished when Corporate South Africa comes together for the greater good.

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Growthpoint appoints George Muchanya as Head of Growthpoint Investment Partners


George Muchanya has been appointed Head of Growthpoint Investment Partners, the Growthpoint Properties (JSE: GRT) alternative real estate co-investment business, effective from 1 July 2022.

Growthpoint’s former Head of Corporate Finance, Muchanya holds a BSc Eng, MBA and is a graduate of the Corporate Finance Programme (London Business School) and PLD (Harvard Business School). An engineer by training, Muchanya’s career spans 25 years in engineering, investment banking and management consulting. Since joining Growthpoint in 2005, Muchanya has played a key role in implementing its strategic initiatives both offshore and in South Africa.

Growthpoint Investment Partners is a leading alternative real estate co-investment partner with R15bn of assets under management. It has a growing portfolio of niche, themed property co-investments to date that include South African healthcare properties in Growthpoint Healthcare REIT, income-generating African commercial properties (excl. RSA) in Lango Real Estate and South African purpose-built student accommodation in Growthpoint Student Accommodation REIT. These co-investments have positive, long-term socio-economic impacts, and are all subject to excellent governance and sustainability oversight frameworks.

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Octodec upgrades landmark Shoprite building

The Company signals its commitment to the CBD through multi-faceted enhancements to an already dominant inner-city retail and residential portfolio

JSE listed REIT, Octodec Investments Limited, today announced that it has commenced upgrading its Shoprite building in the heart of the Tshwane CBD, at a cost of just below R60 million. The facelift is a welcome boost to the existing, bustling retail trade in the CBD, and proves renewed confidence in a node which has clearly emerged stronger post the Covid-19 pandemic.

Jeffrey Wapnick, MD of Octodec, says:With many retailers having returned to the CBD and various in-person university classes resuming, Octodec’s CBD retail assets are experiencing a renewed energy. We are thrilled to announce the news of this project, highlighting that the heart of Tshwane is still thriving and a vibrant place to be.

The first phase will be a revamp of the 4000m² Shoprite supermarket and includes a new Shoprite Liquor and new retail shops on the ground floor. The most prominent visual element will be a triple volume entrance with escalator access from Helen Joseph Street. The escalators will lead downwards to an OK Furniture store. In addition, the project includes renovations to the Helen Joseph Street façade, including a new modern shopfront.

The second phase of the renovation will cater for more retail tenants on the ground floor and the remainder of the basement space. Negotiations are well underway with prospective tenants. Further upgrades include the pedestrian access point from Madiba Street, which will be upgraded to provide a landscaped walkway for easy access to the Shoprite store.

We enjoy deep, mutually beneficial relationships with our tenants, who often provide great insights. It is unlikely they would invest in the CBD without a positive outlook. We are seeing these same tenants lease for longer periods which further underpins their confidence in the CBD long-term. Confidence from our tenants and improved market conditions have spearheaded growth within the CBD, which Octodec will certainly benefit from.” concludes Wapnick.

Shoprite will continue to trade during the duration of the upgrade. The project is expected to be completed in December 2022.

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Octodec, donated 500 Dignity Packs to Unchain Our Children

Octodec, sister company of City Property, donated 500 Dignity Packs to Unchain Our Children

Watching a crane at City Property Pretoria lowering 500 dignity packs for boys, girls, and women into Unchain Our Children’s trailer Tuesday morning, was watching many prayers being answered in front of our eyes. Top quality personal hygiene items, soft toys, sweeties, towels, and facecloths were among the carefully selected items were packed by the staff for distribution among abused children and survivors of gender-based violence.

As statistics are skyrocketing and cases of child abuse, neglect, abandonment, exploitation, and trafficking are being reported daily, Octodec dignity pack brings joy to these survivors as they realize someone is caring enough to have blessed them with a beautiful gift of something special just for them.

Wayne van Onselen, Founder and Executive Director Unchain Our Children was invited to meet with the Managing Director of Octodec, Mr Jeffrey Wapnick. Mr Wapnick has a quest for inner city revival and rejuvenation. His management team shared with us their Change Our City For Good campaign and every story was alive with passion, enthusiasm and dedication describing their projects focussing on the upliftment of the vulnerable in our society.

“Make it Happen”, is the motto of Mr Wapnick. We were privilege to have experienced not only his dynamic business demeanour but also his sincerity and dedication to give back to the community. An accomplished entrepreneur, his vision for mid-city make-overs exceeds all expectations.

With an impressive portfolio of commercial-, industrial-, retail-, office and apartment properties in Pretoria and Johannesburg, Octodec is celebrating more than 50 years of providing beautiful spaces for living life.

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Emira grows dividends off a base of consistent strategic delivery

Emira Property Fund (JSE: EMI) today announced growth in distributable earnings of 3.8% and a 1.0% increase in its cash-backed dividend of 119.79cps for the year to 30 June 2022. Its net asset value per share increased 7.3% during the financial year to 1,628.60cps.

Geoff Jennett, CEO of Emira Property Fund, attributes the strong performance and improved metrics to consistent strategic delivery and incremental steps taken to achieve the best value from investments.

Jennett comments, “Emira has done well to increase dividends and, in the consistent Emira way, continue the strategic direction of the fund with active asset management, focusing on basic property fundamentals and performing them with excellence. In a challenging environment, distinguished by the close correlation between the South African economy and real estate sector performance, it is pleasing to see how Emira’s assets have withstood the pressure and how well aligned our business is for the future.”

Emira’s diversified portfolio is balanced to deliver stability and sustainability through different cycles. It is a mix of 74 directly-held retail, office, industrial and residential assets worth R9.8bn and indirectly-held investments with specialist co-investors, including the JSE-listed specialist residential REIT Transcend Property Fund and retail property venture Enyuka Property Fund. 18% of its asset base is made up of equity investments in 12 grocery-anchored open-air convenience shopping centres in the stable economy of the USA, which provide a buffer to the low-growth domestic environment.

Locally, Emira’s portfolio is most exposed to the retail sector by value and the industrial sector by number of assets. Steady performance from these two portfolios countered the strained local office market. Over several years, Emira has steadily reduced office exposure to 30% of its directly held portfolio value. Emira’s only direct residential asset is The Bolton in Gauteng, where occupancies rose to 98.9% as Rosebank-based corporates returned employees to their offices.

Emira improved its direct portfolio vacancy rate by 1.1% to 5.3%, signifying effective leasing strategies. It achieved a tenant retention rate of 83%, a weighted average lease expiry of 2.7 years and achieved pleasing monthly collections of 100.2% of rent billed. Reflecting the excellent credit quality of Emira’s tenant base, portfolio arrears decreased further to R47.6m. Estimated credit losses have been appropriately provisioned. Emira continued to support its tenants that remained subject to pandemic restrictions, mainly hospitality and entertainment businesses, however, with the easing of restrictions, rental concessions were R1.9m – significantly lower than the prior year’s R33.6m.
The like-for-like value of Emira’s direct South African properties increased by 1.8% during the year and, factoring in capital expenditure of R133.1m, there was a net increase of 0.4%. Emira acquired the multi-tenant Northpoint Industrial Park in Cape Town for R103m and de-risked its portfolio by disposing of five assets during the year, with a further one held for sale. It also focused inwardly and invested in maintaining and improving its assets to increase their attractiveness and competitiveness, including solar energy, water harvesting and backup power projects.

These projects support Emira’s sustainability considerations, a key component of its operations and approach to creating long-term value. Prioritising carbon emissions reductions and partnering to achieve this, Emira achieved a Level B for its eleventh consecutive annual CDP submission.

The REIT increased renewable energy generation at its local properties through energy management and efficiency initiatives. Also, Emira advanced its responsible water and waste management and established natural habitats and indigenous landscaping at its properties to minimise impacts on the natural environment. These initiatives provide Emira and its tenants with resource security and, to some extent, some protection against the continued high increases in utility costs and general deterioration of municipal infrastructure, which are major concerns for business generally and the property sector specifically. As a responsible corporate citizen devoted to genuine transformation in South Africa, Emira remained a Level 2 B-BBEE Contributor.

Emira grew its indirect exposure to residential rental property by increasing its stake in Transcend to 40.69%. Transcend, which has a R2.4bn portfolio, added R32.7m to Emira’s distributable income. Post year end, Emira confirmed it intends to make a general cash offer for all shares in Transcend it does not already own and already has irrevocable support from 16.7% of Transcend shareholders.

Through its 49.9% stake in Enyuka, a retail property venture with One Property Holdings, Emira invests indirectly in shopping centres valued at R1.7bn. Enyuka contributed R89.5m to Emira’s distributable income. Emira has agreed to sell its stake in Enyuka to One for R638,6m, which Emira will use to continue recycling capital. The transaction is expected to be transferred by December 2022.

For its equity investments in the US, Emira invests with its US partner The Rainier Companies. This year, it grew its international assets to 12 grocery-anchored dominant value-oriented power centres that now total R2.4bn (USD148.6m). The US economic environment supports Emira’s value-oriented retail investment, even with rising inflation and interest rates in the broader market. Its open-air centres have quality tenants focusing on the popular value retail segment and providing essential goods and services, especially with grocer anchors. These high-quality value-orientated assets in robust markets enjoy sound property fundamentals and delivered good performance to add R176.7m to Emira’s distributable income.

Emira’s loan-to-value ratio moved slightly lower to 40.5%, with ample debt headroom and a more than adequate 2.8x interest cover ratio. In May 2022, GCR Ratings confirmed Emira’s corporate long-term credit rating of A(ZA) and short-term rating of A1(ZA) and revised its outlook from negative to stable. The REIT continues to benefit from diversified funding sources and has facilities across all major South African banks and access to debt capital markets. It has access to undrawn facilities of R869m, including R500m allocated to the Transcend offer, and cash on hand of R66.7m.

Given the enduring market uncertainty, Emira chooses not to provide earnings and distribution guidance but instead noted its executive directors’ KPI for distributable earnings is 129.46cps for FY23.

Jennett concludes, “After six years of diligent repositioning and capital recycling into strategic investments that improve our portfolio quality and diversification, all our metrics are well aligned and pointing in the right direction. We are in a strong position to manage for the future.”

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