Estate company to act quickly to fill top executive posts
SA Corporate Real Estate has begun the search for a new managing director and financial director after the pair’s sudden resignation on Tuesday last week, chairperson Jeff Molobela said.
Analysts have been concerned that the company did not provide reasons for the sudden resignations of managing director Rory Mackey and financial director Antoinette Basson. Speculation has it that the pair may have been forced to walk given the weak performance of the group over the past year.
But Molobela said he could not provide details on why the two executives were leaving but added that they could be replaced relatively quickly.
Mackey and Basson said they remained committed to the company for a three-month handover period. Mackey said the company had a strong portfolio of assets and that a strategy was in place so that it could perform better as economic cycles improved in SA.
“I am totally committed to the company and to serving my three-month notice period. I will put all my energy into ensuring a smooth transition,” said Mackey.
He said he was “absolutely not pursuing any legal action against the company”.
Molobela, who has been chair since May 2013, said the board was now focused on finding suitable replacements.
“We have been in contact with strong talent which can fulfil the requirements of these roles. These include fund managers and other property professionals who have expressed an interest in leading SA Corporate Real Estate,” he said.
Meanwhile, at SA Corporate’s annual meeting held on Tuesday, only 55% of eligible parties voted in favour of Molobela’s reappointment as chair.
In March, SA Corporate reported a 6% decline in dividend to 42.22c for the year to December because of negative rental reversions across its portfolio.
The company has been trying to sell a large portion of its office assets and its underperforming industrial assets so it can focus on retail and residential property investments.
The rent for the company’s new industrial leases fell 13.5% on average in the year to December 2018 while its retail leases fell 4.6% on average, and 1.5% on average for its office leases. However, its new retail leases were signed at rents of 7.7% higher on average.
Ahmed Motara, a portfolio manager at Stanlib, said SA Corporate had been criticised in the past for not having a clear investment focus, and that profit growth was expected to largely come from its residential portfolio in 2019.
SA Corporate Real Estate’s share price has declined 16.07% since January 2019. On Tuesday the stock closed 18c lower at R2.82. It has a market capitalisation of R7.1bn.