Safari Investments is benefiting from a buoyant defensive mall portfolio
SAFARI Investments RSA, the JSE-listed real estate investment trust (Reit) with a portfolio of premium retail assets in semi-urban areas, said yesterday that it had performed in line with guidance for the period up to February 28.
The company, which owns seven retail centres and a day hospital in SA, and a mixed use development in Namibia, said yesterday in a pre-close operational update for the year to end-March 31, the strategy to focus on food-anchored convenience shopping centres in mainly semi-urban areas had proven to be a key factor in the defensive nature of its portfolio.
“Improvements were evident in all key trading metrics of the portfolio. In particular increased tenant turnover and trading densities are encouraging and bear testament to the resilience and dominance of Safari’s centres.”
Tenant turnover and trading density metrics for February 2022 were in line, or above, pre-Covid levels of
February 2020, notwithstanding the negative impact of an anchor tenant, SuperSpar, not trading at Thabong centre since the July 2021 riots.
In the 11 months to February 2022, the retail portfolio shows a collection rate of 98 percent of contractual billings, and the rate improved to 99 percent should deferrals to collection be disregarded.
The vacancy factor was 3.03 percent, improved slightly from 3.12 percent in 2021.
Safari’s management said indications were the portfolio was reaching a rental base from which sustainable growth could again be achieved, but this might be affected by other economic shocks, including rising inflation.
Redevelopment of the Victorian Village shopping centre in Heidelberg, Gauteng was near completion. It had been re-established as the most prominent convenience retail destination in the town.
Denlyn shopping centre in Mamelodi, Pretoria, became a triple-anchored centre with the recent addition of Boxer Superstore alongside the existing anchors Shoprite and SuperSpar.
Nkomo Village shopping centre continues to trade exceptionally well. Construction of an entire new phase was due to commence in April 2022.
The restoration of Thabong shopping centre, following damage in the July 2021 civil unrest, provided an opportunity to optimise its tenant mix. Where feasible, solar installations were expanded.
In line with the focus on dominant retail assets in semi-urban and township areas, Safari had earmarked two assets for disposal, and talks were under way with potential buyers for Soweto Day Hospital and the Mnandi shopping centre.
The majority of the 36 residential apartments in the Platz am Meer mixed-used development were sold and the remaining nine units were expected to be sold during the 2023 financial year. Safari planned to exit Namibia and focus on the South African retail landscape.