Fo­cus on re­tail keeps Sa­fari’s growth on track

The Star Early Edition - - COMPANIES - Sandile Mchunu

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.

PHOTO: REUTERS

Sa­fari says space in its re­tail cen­tres is an­chored by na­tional re­tail­ers such as Check­ers.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.