4AX-listed Heartwood Properties lifted net asset growth per share of 25 percent for the year to end-February 2021, the company said in a statement yesterday. Photo: James White
4AX-listed Heartwood Properties lifted net asset growth per share of 25 percent for the year to end-February 2021, the company said in a statement yesterday. Photo: James White

Heartwood’s ‘A’ grade commercial properties hold their own through the pandemic

By Edward West Time of article published Jun 15, 2021

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4AX-LISTED Heartwood Properties lifted net asset growth per share of 25 percent for the year to end-February 2021, the company said in a statement yesterday.

Since listing on the stock exchange in March 2018, it has grown net assets by 93 percent.

Commercial property has been under the most pressure in the sector over the past year, but “the fact that we know all our tenants well and have a hands-on approach to the management of our portfolio assisted us immensely in navigating the past year,” said Heartwood chief executive John Whall.

“We have had to endure a lot this past year. We offered rental relief of R2.5 million, but are now back on track with tenants all paying rent as per their lease agreements.”

Vacancies were at 3 percent of lettable area, he said.

Vacancies of B and C grade offices were at an all-time high in Cape Town’s CBD and in Sandton, but Heartwood’s A grade offices made up most of its office portfolio, and these managed to hold their value during the pandemic, said Whall.

“These offices are decentralised, small sectional title offices and by having the flexibility to sell them on to end users makes them attractive to buyers in this market, especially now, due to the low interest rates,” he said.

Heartwood also specialises in warehousing, building warehousing for entrepreneurs who have the option to buy back their building at a later stage.

Whall said they were seeing an increase in enquiries in this sector from mini units to big logistics facilities. Vacancy levels were low, while older industrial buildings were experiencing pressure in this market.

“The key to getting ahead in this space is going to be innovative. As businesses become more accustomed to hybrid working models the idea of returning to a traditional office space will become less appealing,” said Whall.

“Our new development office model, starting with the Sunlvei office development in Somerset West near Cape Town and set for completion at the end of 2022, will be designed to accommodate smaller companies.,” he said. “It will have a business lounge with meeting rooms, zoom pods, a coffee station and hot desk areas for the exclusive use of tenants and owners in the building,” he said.

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