SA Corporate Real Estate planned to deploy about R1 billion from disposals on its balance sheet to reduce gearing. Photo: Pixabay
SA Corporate Real Estate planned to deploy about R1 billion from disposals on its balance sheet to reduce gearing. Photo: Pixabay

SA Corp to deploy R1bn in bid to reduce its gearing

By Edward West Time of article published Dec 14, 2020

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CAPE TOWN - SA CORPORATE Real Estate, which owns retail, commercial and industrial properties in the major metropolitan areas, planned to deploy about R1 billion from disposals on its balance sheet to reduce gearing, the group said in a pre-close briefing on Friday.

The aim of the disposal programme was also to refine the quality of the portfolio by exiting poorer quality properties, demonstrate the validity of the net asset value, and to build cash reserves over the medium term, the company said.

A focus going forward was the reduction of vacancies. In the industrial portfolio vacancies were anticipated to reduce to 1.3 percent by December 31, 2020, from 3.9 percent at June 30, 2020.

The retail portfolio vacancies were expected to reduce to 4.8 percent at December 31, from 5.06 percent at June 30, as a deal with Clicks and Dis-Chem, which would involve them taking occupation in 2021 would reduce Edcon-related vacancies.

Office vacancies were expected to rise to 16.9 percent at December 31, from 16.46 percent, as the sector continues to struggle post the Covid-19 lockdown.

The largest contributor to the office vacancy was GreenPark Corner, which is anticipated to be at 29 percent at year end.

Vacancies in the Afhco mainly Johannesburg-based residential portfolio were expected to end at 14.9 percent from 12.68 percent at June 30, and normalised levels of occupancy were only anticipated in this portfolio well into 2021. Rents had been reduced an average of 14 percent to attract tenants.

November collections, overall, stood at 96 percent in South Africa, and 89 percent at the Zambia joint venture.

SA Corporate’s share price closed 1.16 percent higher at R1.74 on Friday, extending a sharp upward trend that has seen the price gain 43 since October 30.

BUSINESS REPORT

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