Focus on retail keeps Safari’s growth on track
JSE-LISTED property group Safari Investments said it had been able to deliver the goods over the year to the end of March, because it focuses on the retail sector.
Safari said it has been able to grow despite the uncertain political and economic climate.
The group is a real estate investment trust (Reit) with a total asset base of R2.63 billion.
The group said the retail sector delivers higher growth than other sectors of the property market.
“Our experience at Safari has been that the primary focus on retail produces higher distribution growth than residential, office or industrial properties can deliver.
“Retail produces a more predictable rental income stream and thrives under hands-on revenue-enhancing asset management,” the group said.
Safari has increased its portfolio by about 20 percent a year since it listed in 2014.
“Our vacancy factor improved from 4 percent to 2 percent, and national retailers occupy approximately 90 percent of our portfolio space,” the group said.
The portfolio consists of 19 properties. Six of the properties are established retail centres, of which four are regional centres.
The group said although large metropolitan malls could not be considered the most compelling investments, “we find that a fair measure of opportunities remain for the underdeveloped urban retail market in South Africa. Safari is proud to be a Reit in this arena, and while the preference for the retail sector remains we will continue with this focused approach.”
It said space in its retail centres was anchored by national retailers such as Shoprite/ Checkers, Spar and Pick n Pay.
Safari’s rental portfolio is 99 percent based in the retail sector, with 1 percent in the health-care sector.
The group’s property revenue increased 20 percent to R203.4 million year-on-year, while operating profit increased 17 percent to R145m.
Revenue jumped from R171.6m to R205m.
Headline earnings per share fell from 47 cents a share to 43c.
The group said the board had approved a cash distribution of 34c a share based on a scrip dividend process whereby shareholders will have the option of investing their dividends for new Safari shares at an issue price of R7.60 a share.
The group said the board was committed to maximising rental income streams with a proactive letting strategy focused on national tenants and minimising operating expenditure.
Safari shares closed unchanged on the JSE yesterday at R6.60.
Safari says space in its retail centres is anchored by national retailers such as Checkers.