Aug 29, 2012
Growthpoint distribution rises 6.1%, office demand remains weakBack
Cape Town|Africa|Gautrain|Growthpoint|Growthpoint Properties Australia|Industrial|Public Investment Corporation|Rental|Rosebank|Africa|Australia|South Africa|Brooklyn Mall|Central Pretoria Gautrain Station|Centurion Station|Gautrain|Hatfield Station|MIDRAND STATION|River Square|Rosebank Gautrain Station|Waterfall Mall|Arrears Management|Property|Gautrain|Gautrain|Norbert Sasse
© Reuse this
Improved portfolio occupancy levels and arrears management, as well as the positive performance of Growthpoint Properties Australia (GOZ) pushed the distribution from 131c in 2011, to 139c a linked unit, said CEO Norbert Sasse.
Overall, group vacancies fell to 4% in 2012, from 5% in the prior year, with the group achieving a renewal success rate of 75.2% in 2012, up from 2011’s 65.8%.
Sasse noted that total arrears fell to a near-record low of 6.5% of total monthly collectables at R32.6-million this year, compared with R34.8-million, in 2011.
The office sector, which was expected to remain weak over the next year, proved to be challenging during the year under review. However, on the back of aggressive leasing strategies, including lowering renewal rentals, vacancies in Growthpoint’s office portfolio fell from 8.1% to 5.8% during the year, with renewal success rates of 74.6%. Renewal rental growth fell to -1.5% in 2012, from 2.1% in the prior year.
Sasse said that the company was focused on strategies aimed at increasing demand in the office sector and, in line with this, was developing a portfolio of assets along the Gautrain route to entice better office rentals.
This included the proposed R700-million, 35 000 m2 Rosebank office development, near the Rosebank Gautrain station; the R105-million, 6 700 m2 Midrand Town Centre, of which 2 500 m2 would be let to the Gautrain Management Agency, near the Midrand Gautrain station; and the 25 000 m2 Lakeside Centurion office development, close to the Centurion Gautrain station.
Further developments included a potential 200 000 m2 mixed-use development near the Central Pretoria Gautrain station, for which Growthpoint was still securing the rights, and a development near the Hatfield Gautrain station.
Meanwhile, Sasse stated that the industrial sector had a “good run” with solid trading conditions, and continued positive demand for warehousing and distribution units. Vacancy rates fell to 3.4% in the year ended 2012, from 4.3% in 2011, with a renewal success rate of 74%, up from 63.1% in the prior year. However, renewal growth rates dropped to 4% in the year under review, compared with 7.1% in 2011.
The retail sector also recorded a positive performance with a vacancy rate of 3.1%, a renewal success rate of 81.1% and renewal rental growth of 6.7%. Arrears dropped from R16.9-million in 2011, to R14.8-million in 2012.
The company also committed R780-million for retail redevelopments, refurbishments and extensions for Brooklyn Mall, which would account for R250-million over the next 18 months, Kolonnade, River Square, Northgate, Waterfall Mall and Walmer Park.
In its first full year under Growthpoint, the V&A Waterfront, in Cape Town, recorded vacancy rates of 1.6%, compared with 3.5% in 2011, with a renewal rental growth of 2.7% and renewal success of 83.7%.
Growthpoint bought 50% of the V&A Waterfront for R4.9-billion, in partnership with the Public Investment Corporation, last year.
The group reported that the Clock Tower Precinct redevelopment was completed and recorded an occupancy of about 73%, while the Food Court refurbishment would be complete by November 2012 and the new 18 100 m² Allan Gray head office development was on track to be complete by September 2013.
Meanwhile, the group’s Australian assets remained a strong focus as the transactions and yields in the Australian market “surpassed many local opportunities, representing a better use of capital”, commented Sasse.
Growthpoint invested a further R1.5-billion in GOZ in two rights issues, growing its total investment to R3.1-billion. Growthpoint’s 64.5% holding in GOZ held a market value of R4.3-billion.
Growthpoint, with a market capitalisation of R40.1-billion at June 30, reported that, for the first time, its combined property assets reached a value of R53.1-billion.
The group had 403 properties in South Africa worth R35-billion, as well as, through its 64.5% holding in GOZ, 41 properties in Australia valued at R13.1-billion. Its 50% interest in the V&A Waterfront alone was valued at R5-billion.
Edited by: Mariaan Webb© Reuse this Comment Guidelines (150 word limit)
Other Construction News
US-based beverage producer Pepsi this month set up operations, with about 300 employees, at a new R70-million high-tech, custom-built headquarters at OR Tambo International Airport’s Aerotropolis precinct in Johannesburg. Pepsi, through its South African company...
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
This Week's Magazine
Three-dimensional (3D) printers being sold in South Africa by electronics distributor Rectron currently print in two types of plastic, but have a clear upgrade path over the next five years to eventually print in wood, ceramics and metal-alloy materials, says Rectron...
The world’s two dominant commercial aircraft manufacturers, Airbus of Europe and Boeing of the US, both recently announced that they had made record aircraft deliveries in 2014. Boeing set a global record for the industry with 723 commercial aircraft delivered, while...
The Western Cape is shifting further into the renewable-energy space with the official opening of a factory specialising in solar inverters, a key component of solar photovoltaic (PV) plants. The investment in the manufacturing facility in Cape Town aims to boost the...
Business Leadership South Africa (BLSA) last month welcomed Cabinet’s establishment of a technical team war room to undertake various interventions to improve electricity supply security over the short- and medium-term, but added that the private sector also had a...
Despite a rapid rise in mobile connections and the economic and social benefits of such connectivity, more than half of the world ended 2014 unconnected. For this reason, industry commentators believe the biggest impact of mobile technology is still to come –...