Rebosis offloads more offices in shift to malls
Rebosis Property Fund has sold two properties for R897m as it continues to offload offices in favour of shopping centres.
Rebosis announced on Wednesday that it had entered into agreements with two separate parties to buy its Pretoriabased buildings: Bank of Lisbon and SALU.
The company’s founder, Sisa Ngebulana, has been trying to sell about R5bn worth of offices for the past two years.
He previously said he wanted Rebosis to be a retail-focused real estate investment trust and this was why he purchased Baywest Mall in Port Elizabeth and Forest Hill City in Centurion, Gauteng, in 2016.
In 2018, Rebosis sold offices in Cape Town for about R900m to Boxwood Properties. It also announced it was in the process of selling a further R2.2bn property portfolio, which included six Johannesburg buildings and one Pretoria building. The office space sector is still battling high vacancies, while shopping centres offer better returns, said Ngebulana.
Rebosis owns six shopping centres. Many hold dominant positions in their areas, making them more defensive because they face less competition.
Office owners throughout the country say there is a lack of demand for space due to fewer new businesses coming on to the market.
Sandton, the most highly valued office hub in SA, has a total vacancy of about 20%, according to the latest data from the SA Property Owners’ Association. The national average sits at about 11%.
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Ahmed Motara, a fund manager at Stanlib, said Rebosis was selling offices to lower its debt-toasset or loan-to-value ratio. It could focus on better managing its shopping centres once it was a retail specialist.
Rebosis was the worst-performing property fund on the JSE last year, losing 68% on a total returns basis, including capital and dividend growth.
This year, the company’s share price has fallen 5.58%.