Archives for November 2022

The University of Cape Town (UCT) continued its dominance at the Greenovate Awards 2022. UCT students triumphed to take the top spots in the property and engineering categories of the awards, which encourage, enable and reward innovative solutions for a more sustainable built environment by young talent.

Using mushroom roots to create sustainable insulation material, adding artificial photosynthesis to the facades of buildings to power them, how bringing nature into building designs positively impacts the study performance of university students, and investing in property for social impact. These are some of the sustainability ideas explored by local university students in the annual Growthpoint Properties (JSE: GRT) and Green Building Council of South Africa (GBCSA) Greenovate Awards.

UCT triumphed in the engineering category – which incorporates electrical, computer and electronic, civil, and mechanical engineering. First and second place winners were from the University of Cape Town (UCT) and third place from the University of Pretoria (UP).

The property category – which includes quantity surveying, construction management, and property studies – was also won by UCT. The second and third places went to Wits.

For the first time this year, a new award was introduced, sponsored by International Finance Corporation (IFC) and linked to EDGE green building certification, an innovation of the IFC, a member of the World Bank Group. This award was won by students from Wits.

The winners were announced at a gala dinner held at Katy’s Palace Bar in Kramerville, with its spectacular views of the Sandton Central skyline, an iconic South African built environment, which also happens to have the highest concentration of certified green buildings in Africa.

Now in its eighth year, Greenovate launched in 2015 to seed an early passion for sustainable development in university students by focusing on property industry challenges and opportunities. The programme showcases up-and-coming talent, providing a platform for the future leaders of the built industry.

In 2022, 21 students from five universities – Wits, UCT, UP, Nelson Mandela University and Stellenbosch University – entered the awards. The students researched existing challenges, proposed unique solutions to real-life problems and presented their ideas to industry decision-makers.

“This year’s forward-thinking projects are a window into the possibility of a better built environment,” says Grahame Cruickshanks, Growthpoint’s head of sustainability and utilities.

“They are a starting point to meeting the significant need for research and development that offers implementable solutions for a sustainable built environment. Growthpoint is committed to an ambitious target to be carbon neutral by 2050, and innovation in green building and energy spaces is essential to reach our goals. We are proud to drive the Greenovate Awards and confident that, in the very capable hands of South Africa’s young talent, we will see more better, sustainable, green buildings in future.”

The co-founder of the competition, the GBCSA, is entirely dedicated to shaping a green future and a built environment where people and the planet thrive. “The unlimited approach to life and ideas that we see reflected in the Greenovate Awards by our university students is amazing. It is equally exciting to see the property industry coming together to support and create opportunities for our green-minded young talent. The result: a growing community of advocates for green building with a passion for creating a better world and a brighter, greener future,” says Lisa Reynolds, GBCSA CEO.

Prize money of R34 500 is awarded to the winning student/s in each category, while the runner-up receives R17 250, the third place takes home R11 500, and the IFC prize winner/s receives a laptop computer and EDGE Expert training with the GBCSA. All winners receive tickets to attend the GBCSA convention, where the top team in each category will present their projects on the innovation stage. Continuing to promote sustainable thinking and learning, the three top participants for each stream also win entry to a nationally-recognised GBCSA Accredited Professional (AP) Candidate Course.

Students entering the Greenovate Awards gain rare access to mentorship and collaborative advantages. In preparation for the awards, students are given the opportunity, expertise and resources to develop their research into a real and workable product or service for the property industry. The awards’ mentorship programme and workshops with industry experts are also designed to benefit the students immensely.

This year’s mentors for the property stream included Thashni Chetty of Turner & Townsend, Hlolo Manthose of WSP, Makhosazana Mthethwa of Solid Green Consulting, Mthobisi Masinga of GBCSA, Jutta Berns of Ecocentric, Louwna Joubert of Zutari and Reabetsoe Kgoedi of Growthpoint Properties. Engineering stream mentors included Alex Varughese of WSP, Mischa Tessendorf of GBCSA, Mary Anne Fetcher of Zutari and Siziwe Mulidi of AMC Engineers.

The 2022 judges for the property category included Marc Sherratt of Marc Sherratt Sustainability Architects, Kedibone Modiselle of the City of Tshwane, Georgina Smit of GBCSA, Kushinga Kambarami of IFC, Adrie Fourie of Solid Green Consulting, and Sally Misplon of Misplon Green Building Consulting. Judges for the engineering category included Mike Aldous of MPAMOT, Dash Coville of GBCSA, Werner van Antwerpen of Growthpoint Properties, George Muchanya of Growthpoint Properties, Conrad Sanama of IFC, Bruce Paul of Concor Construction, and Songo Didiza of Green Building Design Group.

Through Greenovate young talent is exposed to the very latest in sustainability thinking and ideas, and they enjoy direct access to leading sustainability and property companies, which creates a springboard to launch their future careers. These special awards are growing the green talent pool for Growthpoint, but also for the green building movement and the benefit of SA Inc. During this process, the students also create lasting networks and partnerships.

Next year’s Greenovate Awards promise to be even more exciting, with the planned introduction of a new prop-tech category, and students from all South African universities are invited to register at greenovatecompetition.co.za/register.

Making a name for themselves as innovators, change-makers and planet-shapers, the winners of the 2022 Greenovate Student Awards are:

PROPERTY:

First: Mbali Mahlangeni and Toneka Pasiwe – University of Cape Town: “An investigation into the impact of the South African private sector investing in social infrastructure as a vehicle to attain their Environmental, Social and Governance (ESG) goals”.

Second: Mpidiseng Mohlaba, Manqoba Mthimkhulu and Asanda Gwala – University of the Witwatersrand: “The use of Artificial Photosynthesis in the construction of building facades”.

Third: Kingsley Martell and Kyle Motani – University of the Witwatersrand: “The effect of the greenness of financial performance of South African REITs”.

ENGINEERING

First: Anna Pamela Reid – University of Cape Town: “Mycelium bio-composite as a sustainable insulation solution”.

Second: Msawenkosi Mkhize – University of Cape Town: “Internet of Things technology in monitoring greywater quality for non-potable water use”.

Third: Reinhard Ferreira, Mulisa Shavhani and Beth Watson – University of Pretoria: “Carbon-neutral building cooling via phase change materials with ventilation”.

IFC PRIZE

Winner: Mpidiseng Mohlaba, Manqoba Mthimkhulu and Asanda Gwala – University of the Witwatersrand: “The use of Artificial Photosynthesis in the construction of building facades”.

ABOUT GREEN BUILDING COUNCIL SOUTH AFRICA

Green Building Council South Africa (GBCSA) is a member-based organisation focused on green building advocacy, certification and training. We advocate for all buildings to be designed, built and operated in an environmentally sustainable manner. We are one of 75 members of the World Green Building Council, inspiring a built environment where people and the planet thrive.

ABOUT GREENOVATE:

A Growthpoint initiative in partnership with the GBCSA, these awards are designed to develop and encourage young talent. They expose university students to key sustainability concerns within the industry while introducing the industry to up-and-coming talent. The aim of the awards is for students to learn about green building and sustainability early in their careers, and enter the market as advocates for green building with a passion for creating better, more sustainable cities, towns and neighbourhoods. Visit the Greenovate website to learn more.

The post Greenovate Awards 2022 winners appeared first on Growthpoint Properties.

Hyprop is adapting its shopping centres, not only to satisfy changing consumer habits and expectations but also to ensure that its properties are resilient into the future. This reflects both the group’s own ethical and commercial commitment to reducing greenhouse gases, as well as the prevailing consensus of its stakeholders.

Over the past four years, Hyprop has been investing in auditing and addressing various aspects relating to its own and its tenants’ consumption of natural resources. More such projects are in the pipeline for 2022/23.

“Buildings typically have long lifespans, and much of the stock existing today will still be in use in 2050. Retrofitting existing stock is essential if we are to transition to a low-emission future,” says Steven Riley, Hyprop’s Head of Developments and Sustainability.

Hyprop is working on updating Tenant Criteria Documents which focus on energy, water, and waste, and devising, with its tenants, “house rules” to ensure that everyone reduces their carbon and water footprint in line with Hyprop’s strategy.

Hyprop itself is guided by global targets to reduce emissions and is doing so across a range of projects, from building management to its use of electricity and solar power to water and waste.

As of 1 July 2022, Hyprop was officially the first REIT in South Africa to implement a collective zero-wet waste strategy across its entire portfolio. After a successful trial period that ran from mid-May to end-June 2022, the wet waste management programme has been successfully implemented at all Hyprop sites.

All food and organic waste are now separated at source, diverting wet waste from landfills to composting or composting facilities. This will ensure that Hyprop complies with new management regulations being applied in various South African cities and provinces. Its target is to divert 100% of organic waste away from landfill by 2027, up from 50% in 2022.

The Group’s overall recycling rate across the centres was also up to 46% in the 2022 financial year, compared to 44% in 2021. During 2022/23, Hyprop will start to upgrade seven more centres (Canal Walk has already been upgraded) with the best-suited wet waste management technology and equipment available on the market relevant to each property.

On energy, Hyprop’s reduction strategy identifies both short-term and long-term opportunities to reduce carbon emissions. It is implementing low-cost initiatives which have the potential to save c. R6 million at a cost of approximately R400 000.

The solar PV panels that were installed in 2020 at six of the centres performed above expectations and, together with the existing system at Clearwater Mall, produced a total of 10 684 000 kilowatt hours (kWh) for the 2022 financial year. This results in a saving of 6 000 tonnes of coal burned, over 15 million litres of water, and the avoidance of more than 11 000 tonnes of carbon dioxide emissions into the atmosphere.

In the year ahead, Hyprop will implement the next phase of solar PV at Woodlands Boulevard, Rosebank Mall, and Clearwater Mall. The total system size is 7 254 kilowatts peak (kWp) and it will produce 8 919 482 kWh per annum, equating to a saving of almost R21 million per annum.

Water-efficient equipment is being installed throughout the portfolio. Water efficiency is considered when choosing technical plant and equipment such as toilets, urinals, taps, and air-conditioning systems for all new developments, renovations, and upgrades. Bulk water consumption at centres is monitored daily to identify unusual patterns that might indicate leaks. IOT.nxt, an internet-based smart building management system (BMS) pilot has been launched at Clearwater Mall. This should improve the way consumption is measured and monitored.

Some of the opportunities for water saving that management has identified and implemented in the past year include installing Propelair toilets at Rosebank Precinct, Woodlands and Hyde Park Corner and converting some of the wet cooling systems in air conditioners to dry cooling. These initiatives will continue in the coming months.

“We simultaneously manage the costs of utilities and centre operational costs while investing in the changes needed to reduce their environmental impact and build the necessary resilience to withstand future shocks, such as exorbitant tariff increases and prolonged droughts,” Riley says.

IN CONVERSATION WITH: Greg Booyens, CFO, Emira Property Fund

A diversified funding base mitigates risk. But this is only the starting point. Building great relationships with our debt capital providers is as important as the pricing and terms of the funding they offer – and it is a defining feature of our business.

Considering interest is payable before dividends, at Emira we view our debt funders as our most important source of capital.

Debt providers are partners in our success; we are working towards the same goals. Keeping them aligned with our business strategy and outlook supports our strategic agility. It ensures we can move fast to take advantage of opportunities and supports easy conversations when refinancing facilities or accessing new debt.

With this understanding, the Emira management team actively engages our debt providers about our business. From the biannual results presentations given to our funders, including both the South African banks as well as institutional debt investors from the capital markets, together with their credit teams, to frequent one-on-one discussions, we always strive to provide a clear and transparent view inside our business and be available to answer any questions.

In recent years, Emira has gradually evolved. From being a direct owner of around 150 traditional commercial property assets, we have rebalanced our portfolio, expanded our diversification offshore and into the residential to-let property market, and now have a combination of direct and indirect holdings.

We brought our debt funders along with us on this journey, ensuring they had an excellent level of understanding and comfort in our motivation and the impacts on our balance sheet and structure at every turn. Each small step we take along our journey includes measuring our debt and equity capital providers’ comfort with our direction.

Emira’s DMTN programme, one of the oldest in the sector, seldom auctions off debt. Our first choice is to move forward by placing notes with existing funders with whom Emira has built up relationships, where there is appetite.

Looking after our funders not only promotes good pricing but builds a track record that stands Emira in good stead during tough times, as we were fortunate to learn during the pandemic.

At a REIT like Emira, debt is refinanced regularly. Our preference is to have many smaller facilities rather than a few larger ones. While this approach requires more work, it is very worthwhile. It enables more regular engagement with our funders and spreads risk more effectively.

Our obsession with acting with integrity, respect and trust is also reflected in the valuation of our properties, which is the foundation of our business and our funding. We take extreme care that our valuations are true and realistic. Our funders tell us that the understanding we provide on our values and valuation process sets Emira apart.

We are extremely pleased that our debt providers are partnering with us on our sustainability journey. Furthering our funding partners’ and Emira’s sustainability goals, and the greater good, in the course of our business, we recently took up sustainability-linked funding. In 2021, Emira became the third company in South Africa to list a sustainability-linked corporate bond, followed by two further unlisted sustainability-linked bonds. In April this year we concluded an unlisted green bond to refinance R200m of eligible sustainable green projects undertaken by Emira over recent years.

Great relationships with our debt capital providers, built on mutual trust and sharing relevant information, underpin the value we create for all our stakeholders and support Emira to provide great real estate.

The post Building relationships beyond funding appeared first on Emira Property Fund.

Growthpoint Properties has reduced industrial vacancies in its Western Cape portfolio to a low 0.8%, further confirming a discernible resurgence in the industrial property market.

“We are seeing an increase in asking rentals in the Cape Town industrial property market as stock levels fall,” reports Timothy Irvine, Growthpoint regional asset manager for the Western Cape.

Among Growthpoint’s most significant industrial leasing deals in the Mother City recently, it has signed leases with Meat Only at Greenfield Industrial Park and Pioneer Fishing for a Montague Gardens warehouse, each for some 7,000sqm.

Meat Only is focused on deboning, packing and distributing quality pork, and supplies many of South Africa’s biggest food brands and exports its products across the continent. The brand’s popularity was boosted during the pandemic when, in response to community wishes, it opened its first retail outlet store, which has been a huge success. It has since opened a second store and become a household name in its community.

Meat Only’s extensive search for the right premises led them to choose an innovative green space across two side-by-side units at Greenfield Industrial Park on a long lease. This quality, efficient and upmarket industrial park is designed to meet the needs of modern businesses, with a prime location in Airport Industria, near Cape Town International Airport.

Greenfield Industrial Park is a healthy and appealing working environment that is economical for occupants as a result of several green building features, including a rooftop solar photovoltaic (PV) installation. It is currently registered with the Green Building Council South Africa for its third green building certification, having previously achieved South Africa’s first Green Star SA certification for industrial property and a net-zero carbon pilot certification. Its new green building rating should be received by mid-2023. The park features solar power, water-wise landscaping, waterless urinals and low-energy light fittings that complement its smart design, which uses natural light to save on lighting costs.

With Meat Only’s extensive refrigeration needs, power was a key consideration for its premises selection, making Greenfield Industrial Park an excellent choice. The new facility is focused on cold storage and warehousing but also includes a combined 600 sqm of A-grade offices on the mezzanine levels of the units. For its cutting-edge cold-storage installation and intricate fit-out, Meat Only has prioritised compliance in all areas.  Due to the complexity of the installation, it has taken considerable time to produce the final product, and the facility should begin operating before the end of 2022.

With its secure, central location, Greenfield offers Meat Only great transport connections, with good proximity to the N2 highway, superb visibility and prominent signage exposure. The premises has a dedicated entrance, and the large yard areas across both units allow excellent truck articulation.

One of the largest pelagic fishing companies in South Africa, Pioneer Fishing, has also signed up for industrial space with Growthpoint. Pioneer Fishing produces fishmeal and fish oil for local and export markets and has leased a storage warehouse in Chain Avenue, Montague Gardens, which is supported by an excellent yard area.

“Pioneer Fishing foresees operational improvements with the relocation to Montague Gardens through more streamlined logistics from the factory to port,” says Andre du Preez of Pioneer Fishing.

Montague Gardens is a well-established industrial area popular for its immediacy to Cape Town’s port and CBD and supported by excellent arterial road access via the N7 and N1.

“Cape Town’s industrial property market is distinguished by the fact that there is limited stock available. Existing Cape Town industrial areas are generally well located with access to main arterial roads, and new supply is limited, which is part of what is driving the popularity and pricing of this property sector in the region,” says Irvine.

Growthpoint makes space to thrive with innovative and sustainable property solutions. It is an international property company invested in real estate and communities in South Africa, across Africa, Australia, Poland, Romania and the UK. Growthpoint is 50% co-owner of the V&A Waterfront in Cape Town.

Find out more about our industrial portfolio and spaces to let

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Strong income growth due to material reduction in residential vacancies bolsters Octodec’s full year performance

Accelerated disposal programme and improved performance results in improved loan-to-value (LTV) ratio

Highlights:

• Rental income R1 930.5 mil (FY2021: R1 838.7 mil)
• Profit (loss) for the year R605.1 mil (FY2021: (R174.8 mil))
• Distributable income after tax (REIT funds from operations R466.1 mil (FY2021: R358.4 mil)
• Cash generated from operating activities before dividend payment R391.1 mil (FY2021: R357.4 mil)
• All-in weighted average cost of funding 8.7% (FY2021: 8.5%)
• Distributable income per share (cents) 175.1 (FY2021: 134.6)
• Dividend per share (cents) 130.0 (FY2021: 50.0)
• Net asset value (NAV) per share R23.28 (FY2021: R23.20)
• Loan-to-value (LTV) 39.7% (FY2021: 43.2%)

Tuesday, 1 November 2022 – JSE listed REIT Octodec Investments Limited today announced its annual results for the year ended 31 August 2022, recording a large dividend pay-out and a material reduction in vacancies in the residential and industrial sectors, with the residential portfolio in particular performing ahead of expectations. Although there has been a continued downward resetting of rentals across most sectors, from an Octodec perspective, several renewals are being concluded at increased rentals and demand for space in both Johannesburg and Tshwane CBDs remains strong.

Portfolio Performance

Octodec has experienced an increase in residential leasing activity resulting in significantly reduced vacancies and positive reversions on renewals which have positively impacted the Group’s results.

Residential income increased 7.6% year on year primarily due to the return of students to universities for in-person classes and increased activity at OR Tambo Airport, which greatly benefited letting activity at Kempton Place. Added to this, initiatives such as the introduction of shared and furnished accommodation at some of its residential buildings, and value-added services such as complimentary Wi-Fi for tenants in various other buildings resulted in increased demand.

Commenting on the growth within the residential sector, Jeffrey Wapnick says: “There is a clear demand for affordable, quality accommodation in both the Tshwane and Johannesburg CBDs. Due to the success of our value-enhancing initiatives, we have seen an impressive 33.0% increase in leasing enquiries. We intend to accelerate the rollout of these offerings to more residential buildings to attract new tenants.

With vacancies almost at pre-COVID-19 levels, the focus will now change to increasing rentals per unit while at the same time being cautious of the impact that high inflation and increased interest rates will have on the disposable income of tenants and the consequential effect on vacancies.”

Retail shopping centres continued to perform well, with positive reversions on new leases and renewals. As a result, rental income from Octodec’s shopping centres increased by 5.9% year on year. However, the first half of the year was still impacted by lockdown restrictions and the Group’s street shops experienced subdued activity with several negative rental reversions concluded during the year, and a slight increase in vacancies has resulted in a marginal increase in rental of 3.0% year on year.

Jeffrey Wapnick adds: “Our CBD assets are well located in convenient locations with high foot traffic. Despite market conditions still being under pressure for the typical South African consumer, we continue to see renewed confidence from large national retailers to sign extended leases for larger pockets of space and willingness to test the CBD market with brands previously only found in malls.”

In the office portfolio, the oversupply of office space in the major cities, due to hybrid or work-from-home models, continues to put pressure on occupancy levels at office buildings, corresponding with the broader sector trend. As a result, rental income in the office sector decreased by 1.3% year on year.

Despite general rental pressure in the industrial sector, occupancy has improved considerably, with a number of Octodec’s industrial buildings being 100% occupied. During the year, many new enquiries were received, and the Group experienced improved collections from places of worship and some colleges within its specialised portfolio.

According to Octodec FD, Anabel Vieira, “The distributable earnings calculation was positively impacted by reduced debt and the lower interest rate environment (at the time), which reduced finance costs.

We have made strides over the past two years to manage both our hedging profile and debt maturity profile, and we will continue to monitor opportunities to extend existing hedges, where appropriate.”

Disposals

There has been a marked improvement in the conclusion of sales of properties previously identified for sale. Octodec has sold and transferred 20 properties for a total net consideration of R218.4 million.

Prospects

Jeffrey Wapnick concludes: “From a capital management perspective, our focus remains on maintaining a healthy balance sheet with an acceptable loan-to-value ratio. We will continue to assess new development and conversion opportunities as they present themselves, and as such, Octodec will retain sufficient funds for developments and acquisitions for this purpose while at the same time providing a steady distribution to our shareholders.

Although the property sector as a whole faces certain headwinds, including poor municipal service delivery as well as rising inflation, increasing utilities costs and high-interest rates, we are confident that Octodec is well positioned through its niche expertise, diversified and defensive portfolio to benefit from a medium-to-long term economic recovery.”

Dividend

Distributable income after tax increased by 30.0% from R358.4 million to R466.1 million. the Board has declared a final dividend of 80.0 cents per share, with a total dividend of 130.0 cents for the full year (FY2021: 50.0 cents) – a 160% increase on the prior year.

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