Despite having faced major challenges in 2020, 4 Africa Exchange-listed Heartwood Properties recorded net asset growth per share of 25% for the financial year ended February 28.

Since first listing on the stock exchange in March 2018, it has grown its net assets by a total of 93%.

With commercial property the most under pressure in this sector, the company says that these figures are a “welcoming relief”.

“We’ve had to endure a lot this past year. We offered rental relief of R2.5-million in the form of rental reductions but are now back on track with tenants all paying rent as per their lease agreements.

“Vacancies are at 3% of our lettable area. The fact that we know all our tenants well and have a hands-on approach to the management of our portfolio has assisted us immensely in navigating the past year,” Heartwood CEO John Whall says.

The company acclaims that its A-grade offices, which comprise most of its office portfolio, allowed it to hold its value during the pandemic.

These offices are decentralised, small sectional title offices, and by having the flexibility to sell them on to end-users, makes them attractive to buyers in this market, especially now, owing to the low interest rates, the company explains.

Heartwood also specialises in the warehousing sector, building warehousing for entrepreneurs who have the option to buy back their building at a later stage.

Whall notes that the company is seeing an increase in enquiries in this sector, from mini units to massive logistics facilities.

While vacancy levels are still low, the company points out that this is a sector to follow, while older industrial buildings continue to experience pressure in this market.

Heartwood also mentions that a competitive advantage in this space would be innovation.

“As businesses become more accustomed to hybrid working models, the idea of returning to a traditional office space will become less appealing. There is going to be room to grow if developers rethink how buildings are designed.

“As was the trend pre-Covid-19, Cape Town remains the tech hub of South Africa, attracting global companies specialising in data, information technology and computer programming,” the company says.

These companies employ hundreds of young employees, and Whall notes that they were among the first to get back to working from the office, albeit with flexi hours.

Its development office model, starting with an office development in Somerset West, near Cape Town, and set for completion at the end of 2022, will be designed to accommodate smaller companies.

“It will have a business lounge with meeting rooms, zoom pods, a coffee station and hot desk areas for the exclusive use of tenants and owners in the building.

It will make their office space much more efficient as they will not need their own board rooms, and their roving staff, who work mostly from home will have a space, when they come in.

“We are very excited about this new concept and will be rolling these out on the appropriate sites. With more people wanting to decentralise their offices, moving them closer to where they live, property innovation will become the new normal,” Whall enthuses.

Heartwood also completed the Soleil office development, in Bryanston, Gauteng, during the past year, while construction of Buildit’s flagship development in the Western Cape is on track for completion on June 30.