NEWS WRAP - 16 MARCH 2015
Category NEWS WRAP - 16 MARCH 2015
Green Building Council calls for greater energy efficiency
Green Building Council of South Africa says it’s high time the business sector and ordinary South Africans pick up the pace of greater energy efficiency, reports SA Commercial Prop News. The call comes in the wake of further electricity hikes proposed in the 2015 Budget by Finance Minister Nhlanhla Nene. Brian Wilkinson, Chief Executive of the GBCSA, is reported as saying that although hikes are “bad news for both business and ordinary South Africans”, the crisis is also an opportunity which “illustrates now more than ever before … the crucial need for going green and greater efficiency.” Wilkinson puts the average green office building saving in electricity consumption at 34% compared to a standard building.
Green Tool returns savings on existing buildings
Some of South Africa’s best known property developments, including the V&A Waterfront, have seen significant environmental and financial improvements since their adoption of the Green Building Council of South Africa’s (GBCSA) Existing Building Performance (EBP) Tool – the development of which was sponsored by Nedbank Property Finance, according to eProp Commercial Property News. GBCSA’s current suite of Green Star SA rating tools focus largely on the design and construction of new buildings and major refurbishments, which make up about 2% of building stock. The new EBP tool assesses operational and management performance of buildings in the remaining 98% of stock. Managing executive of Nedbank Corporate Property Finance, Robin Lockhart-Ross, is reported to have said the EBP tool is “expected to return environmental and financial savings for property owners who use it to incorporate green features in their existing buildings.”
Vukile set to acquire Capital Land in R106m deal
Vukile Property Fund has announced it will acquire Capital Land Asset Management, an external management company owned by Synergy Income Fund, reports SA Commercial Property News. The transaction is reportedly valued at R106 million. Laurence Rapp, CEO of Vukile, described the transaction as the next step in Vukile’s successful corporate action with Synergy, which became a listed subsidiary of Vukile in February when Vukile gained control of Synergy’s assets. Vukile holds 64.61% of all Synergy voting securities. Now, Capital Land is set to become a wholly-owned subsidiary of Vukile, bringing the external manager of Synergy into the Vukile stable. If conditions attached to the transaction are met, it will be effective from 1 May.
Listed property sector faces headwinds
The listed property sector may lose steam in the coming months of 2015, according to a report on BDLive. This is despite their recent performance which saw the sector outstrip equities, bonds and cash to record a total return of 44.34% for the 12 months to end of February. But this year, notes the report, the country’s growth is set to be “tepid”, a forecast that does not bode well for firms that own office properties which need activity from businesses to decrease vacancies. The same applies to retail landlords who rely on consumer spending. However, the report also quotes Stanlib listed property funds head Keillen Ndlovu as saying it is important to note that listed property prices rose between the middle of last month and early this month even when bond prices were weakening.
Growthpoint’s office portfolio delivers R1bn net income
Despite tough local economic conditions, South Africa’s largest property group Growthpoint Properties delivered net property income growth of 21.2%, boosted by its Tiber and Abseq acquisitions for the six-month period ended December, reports SA Property Insider. This resulted in net property income from its office portfolio reaching R1bn for the first time ever in a half-year. Growthpoint CEO, Norbert Sasse, attributed the results to significant growth in and a solid performance from, the company’s South African property portfolio. Growing distributions from Growthpoint’s 64.5% holding in Growthpoint Properties Australia (GOZ), together with favourable exchange rates for Growthpoint, also enhanced distributions, he is reported to have said.
Foreign land Bill a 'setback' for economy
According to a report in the Mail & Guardian economists say the government’s decision to bar non-citizens from buying agricultural land is short-sighted and South Africa cannot be compared to other countries that forbid foreign ownership of land. The Land Holdings Bill, which will soon be introduced to Parliament for approval, will also stop any individual from owning more than 12,000 hectares, with the government undertaking to buy and redistribute excess land. The report also quotes Neil Gopal, chief executive of the South African Property Owners Association, as saying the Bill will have a negative effect on investor sentiment. “It has the potential to hamper investor confidence in the country and curb foreign direct investment flows,” said Gopal.
Joburg and Cape Town face off in Best City challenge
A new report pits rival cities – Joburg and Cape Town – against each other as a destination of choice for the world’s wealthiest individuals, reports Business Tech. The 2015 Knight Frank Global Wealth Report, which ranks nations according to their number of ultra-high net worth individuals, identified Johannesburg (28th) and Cape Town (36th) among the top 40 global cities holding the most value for wealthy people. While Johannesburg has reportedly become an increasingly popular destination for prime industrial property, with larger areas of the city’s industrial zones being bought up by private Chinese investors, the report found that Cape Town offers the best value for luxury property in the world.
Sandton developers remain gung-ho
Developers are still gung-ho about Sandton despite the addition of 144,800 square metres to the area’s prime office space in 2014, reports Moneyweb. Latest figures from real estate company Jones Lang LaSalle indicate that Sandton is the second largest supplier of office space after the Johannesburg CBD. According to the report, more developments have been announced to expand the suburb’s development pipeline, despite concerns about the suburb’s congestion, traffic and road infrastructure. These include Old Mutual Emerging Markets which is the latest company planning to take up more space in Sandton. The retail sector has also piqued the interest of developers. MMI Group has undertaken a development, where the old Village Walk shopping centre stood on the corner of Maude Street and Rivonia Road, to the tune of R2.5 billion.
Dipula Income Fund grows its portfolio by R336m
JSE-listed REIT Dipula Income Fund has announced it has entered into agreements to acquire uMzimkhulu Shopping Centre in KwaZulu-Natal as well as Corporate Industrial Park in Polokwane from two different vendors, according to eProp Commercial Property News.
Corporate Industrial Park in Limpopo’s capital was acquired for R143 million and consists of modern industrial units. The 15,740-square-metre UMzimkhulu Shopping Centre, on KwaZulu-Natal’s South Coast, was purchased for R193 million and is mainly occupied by national tenants at approximately 87% of the total GLA of the centre. Once implemented, together with other transactions announced previously, Dipula’s portfolio will increase to R5.7bn, consisting of 56% retail, 25% industrial and 19% offices in GLA, across South Africa. Dipula is a REIT with exceptional B-BBEE credentials. It is managed by its 100% black owned management company.
Fairvest announces solid results
Niche retail Real Estate Investment Trust (REIT), Fairvest Property Holdings Limited, announced an interim distribution of 7.427 cents per linked unit, a 10.03% increase of the comparable period which is at the upper end of the guidance previously issued of between 9% and 10% growth in distribution, reports eProp Commercial Property News. The results
represent a 27.6% annualised return to shareholders for the 2014 calendar year. Fairvest owns and manages a portfolio of 31 properties and focuses on retail assets in non-metropolitan and rural shopping centres, as well as convenience and community shopping centres servicing the lower LSM market in high-growth nodes, close to commuter networks.
Author: SHARON DELL