Rebosis to focus on developing Forest Hills and Baywest precincts

REBOSIS Property Fund plans to focus on the development of the precincts around its new malls, Forest Hills in Centurion and Baywest in Port Elizabeth.

These two regional retail centres were acquired by the listed black-managed real estate investment trust in September last year when the fund acquired Billion Property Developments for R5.2 billion.

Andile Mazwai, the chief executive of Rebosis, said yesterday that the priority of the fund was to get the nodes working around these two malls and get offices established in the precincts. Excluding Rebosis’s 36 percent holding in New Frontier Properties, the fund’s portfolio grew by 45.3 percent in the year to August to R18.82bn, because of the acquisition of these two malls.

Rebosis’s portfolio comprises six shopping malls, 42 office buildings and a single industrial property in Johannesburg. Mazwai said Mdantsane and Hemingways, two of the original assets in the portfolio, have also been earmarked for expansion and upgrades, which was anticipated to result in valuation uplift and continued differentiation in their nodes.

He said Hemingways was nine years old and they would be spending about R55 million for a full revamp of the food court and food offering.

This revamp would start early next year, so they did not disrupt trading in the centre during the holiday season, he said.

Mazwai said Mdantsane was 10 years old and the 36 000m² centre needed a physical expansion, but this was a longer-term project they were flagging. It did not have committed times or amounts for this project. “It’s really doing very nicely for us. Although it is one of our smaller centres, it has got our highest footfall at 10 million in the year,” he said.

Rebosis yesterday reported a 7.4 percent growth in total distributions a share of 128.35 cents for the year to August.

The dividend for the fund’s A-shares increased by 5 percent year-on-year to 240.82c.

Mazwai said the fund’s A-shares were a legacy from its acquisition of Ascension, which already had A-shares.

He said the owners of these A-Shares, which made less than 10 percent of Rebosis’s share issue and who were guaranteed a distribution growth of 5 percent a year, insisted that Rebosis take them over in the acquisition and Rebosis could not disenfranchise them.

Revenue rose by 35 percent to R1.88bn from R1.39bn.

The retail portfolio had a 0.6 percent vacancy rate and the offices 5.9 percent.

Mazwai said the total vacancy translated into 34 000m², but a capital recycling programme in progress would result in the conversion of a 11 600m² building in Mahikeng into a 633-bed student residence at a cost of R25m.

He said Rebosis did not have any long-term ambition to expand into the student accommodation market.

Although Rebosis was not actively trying to sell it, they would consider good offers that made sense in terms of their valuation of the asset, he said.

Rebosis at the end of the reporting period reduced its interest in New Frontier Properties to 36 percent from 67.6 percent to a special purpose vehicle owned by a broadbased black economic empowerment consortium with the objective of introducing additional shareholders into New Frontier Properties.

Rebosis is forecasting distribution growth of an ordinary share of between 4 percent and 6 percent for its current financial year.

Shares in Rebosis rose 7.62 percent yesterday on the JSE to close at R10.45.

roy.cokayne@inl.co.za