JSE listed REIT, Octodec Investments, today announced that it has been approved for a secondary listing on A2X Markets.
The group informed shareholders that its primary listing on the JSE and issued share capital will be unaffected by the secondary listing on A2X.
A2X is a licensed stock exchange authorised to provide a secondary listing venue for companies and is regulated by the South African Financial Sector Conduct Authority in terms of the Financial Markets Act 19 of 2012.
The Company completes its R60 million multifaceted Shoprite upgrade, playing its part in uplifting Tshwane retail business district.
23 February 2023 – JSE listed REIT, Octodec Investments Limited, today unveiled the new look and feel of its Shoprite building in the heart of the Tshwane CBD – a R60 million investment project announced in August 2022 to boost and uplift the bustling central node.
Jeffrey Wapnick, MD of Octodec, says, “This project cements our commitment to the City of Tshwane which continuously presents growth opportunities for our already dominant inner-city retail and residential portfolio. It represents a renewal of our relationship and an upgrade of our service to a city that is increasingly attracting national retailers.”
“We are excited to see this new building bring an elevated experience to our tenants, who have trusted us with quality developments that enhance their day-to-day lives. It is a value adding project that will further deepen the trust and confidence our clients have in our inner-city knowledge, which bodes long term relations,” added Wapnick.
While Shoprite continued to trade during the upgrade, tenants will now enjoy their daily shopping in a newly furbished 4000m² Shoprite supermarket which includes a new Shoprite Liquor and new retail shops on the ground floor.
In addition, the tenants will be exposed to other prominent brand-new architectural elements such as a triple volume entrance with escalator access from Helen Joseph Street, which lead downwards to the newly refurbished OK Furniture store.
A launch event was held with Shoprite staff celebrating the new building and exciting customer activities including prize giveaways from in-store suppliers and Shoprite-branded promotional items.
Global Credit Ratings (GCR) reaffirms Octodec’s rating
JSE listed REIT Octodec Investments Limited today announced that Global Credit Ratings (GCR) had reaffirmed Octodec’s credit rating.
Shareholders and noteholders are advised that GCR undertook a credit rating review of Octodec, as guarantor of wholly owned subsidiary Premium Properties Limited’s Domestic Medium-Term Note Programme dated 23 February 2015. On 21 February 2023, GCR re-affirmed the long-term national scale issuer rating assigned to Octodec of A-(za) and the short-term issuer rating of A2(za), with the outlook stable.
GCR’s credit rating announcement is publicly available on GCR’s website at https://gcrratings.com/announcements/gcr-affirms-octodec-investments-limiteds-issuer-ratings-of-a-za-a2za-with-a-stable-outlook/
Shareholders and noteholders can also contact Elize Greeff at elizeg@octodec.co.za to request an electronic version.
Strong income growth due to material reduction in residential vacancies bolsters Octodec’s full year performance
Accelerated disposal programme and improved performance results in improved loan-to-value (LTV) ratio
Highlights:
Tuesday, 1 November 2022 – JSE listed REIT Octodec Investments Limited today announced its annual results for the year ended 31 August 2022, recording a large dividend pay-out and a material reduction in vacancies in the residential and industrial sectors, with the residential portfolio in particular performing ahead of expectations. Although there has been a continued downward resetting of rentals across most sectors, from an Octodec perspective, several renewals are being concluded at increased rentals and demand for space in both Johannesburg and Tshwane CBDs remains strong.
Portfolio Performance
Octodec has experienced an increase in residential leasing activity resulting in significantly reduced vacancies and positive reversions on renewals which have positively impacted the Group’s results.
Residential income increased 7.6% year on year primarily due to the return of students to universities for in-person classes and increased activity at OR Tambo Airport, which greatly benefited letting activity at Kempton Place. Added to this, initiatives such as the introduction of shared and furnished accommodation at some of its residential buildings, and value-added services such as complimentary Wi-Fi for tenants in various other buildings resulted in increased demand.
Commenting on the growth within the residential sector, Jeffrey Wapnick says: “There is a clear demand for affordable, quality accommodation in both the Tshwane and Johannesburg CBDs. Due to the success of our value-enhancing initiatives, we have seen an impressive 33.0% increase in leasing enquiries. We intend to accelerate the rollout of these offerings to more residential buildings to attract new tenants.
With vacancies almost at pre-COVID-19 levels, the focus will now change to increasing rentals per unit while at the same time being cautious of the impact that high inflation and increased interest rates will have on the disposable income of tenants and the consequential effect on vacancies.”
Retail shopping centres continued to perform well, with positive reversions on new leases and renewals. As a result, rental income from Octodec’s shopping centres increased by 5.9% year on year. However, the first half of the year was still impacted by lockdown restrictions and the Group’s street shops experienced subdued activity with several negative rental reversions concluded during the year, and a slight increase in vacancies has resulted in a marginal increase in rental of 3.0% year on year.
Jeffrey Wapnick adds: “Our CBD assets are well located in convenient locations with high foot traffic. Despite market conditions still being under pressure for the typical South African consumer, we continue to see renewed confidence from large national retailers to sign extended leases for larger pockets of space and willingness to test the CBD market with brands previously only found in malls.”
In the office portfolio, the oversupply of office space in the major cities, due to hybrid or work-from-home models, continues to put pressure on occupancy levels at office buildings, corresponding with the broader sector trend. As a result, rental income in the office sector decreased by 1.3% year on year.
Despite general rental pressure in the industrial sector, occupancy has improved considerably, with a number of Octodec’s industrial buildings being 100% occupied. During the year, many new enquiries were received, and the Group experienced improved collections from places of worship and some colleges within its specialised portfolio.
According to Octodec FD, Anabel Vieira, “The distributable earnings calculation was positively impacted by reduced debt and the lower interest rate environment (at the time), which reduced finance costs.
We have made strides over the past two years to manage both our hedging profile and debt maturity profile, and we will continue to monitor opportunities to extend existing hedges, where appropriate.”
Disposals
There has been a marked improvement in the conclusion of sales of properties previously identified for sale. Octodec has sold and transferred 20 properties for a total net consideration of R218.4 million.
Prospects
Jeffrey Wapnick concludes: “From a capital management perspective, our focus remains on maintaining a healthy balance sheet with an acceptable loan-to-value ratio. We will continue to assess new development and conversion opportunities as they present themselves, and as such, Octodec will retain sufficient funds for developments and acquisitions for this purpose while at the same time providing a steady distribution to our shareholders.
Although the property sector as a whole faces certain headwinds, including poor municipal service delivery as well as rising inflation, increasing utilities costs and high-interest rates, we are confident that Octodec is well positioned through its niche expertise, diversified and defensive portfolio to benefit from a medium-to-long term economic recovery.”
Dividend
Distributable income after tax increased by 30.0% from R358.4 million to R466.1 million. the Board has declared a final dividend of 80.0 cents per share, with a total dividend of 130.0 cents for the full year (FY2021: 50.0 cents) – a 160% increase on the prior year.
Octodec Investments is proud to announce its newly launched partnership with Property Point. Octodec will support two black property valuer firms through its Enterprise Development Programme. These two individuals are hopefully the first of many who will receive support from Octodec through this programme.
This initiative is a testament to Octodec’s commitment to its CSR strategy. As a business that regularly monitors and prioritises its social and environmental impact, Octodec aspires to create value beyond financial return.
Aligned to this, Mogalakwena Valuers and Intengo Valuers and Property Consultants were recently inducted into Property Point’s programme, with the intention of empowering these two black-owned property valuation businesses over the medium-to-long term.
The individuals will have the opportunity to grow their businesses to a point where they are able to provide the services required by listed companies, ultimately ensuring their best chance at success.
Octodec recognises that its efforts make a difference in the lives of the people, communities, and areas in which it operates, and are thrilled by the prospect of working with both businesses in the near future.
A strong entrepreneurial ecosystem underpins Octodec’s relationship with its supplier community, across various industries, to stimulate local economies. However, the commercial success of these businesses requires more than good ideas. It requires intensive and accelerated training in the form of improving sales and marketing, business, financial and people management. Octodec has partnered with Property Point to achieve exactly this.
More than half of South Africa’s children continue to live below the poverty line, where poor dietary intake, food insecurity and poor quality of essential services prevail. According to UNICEF South Africa, chronic malnutrition is an underlying cause of half the childhood deaths in SA. Of those that survive, one in three are stunted due to malnutrition. As corporate South Africa, it is our duty to step up and assist.
On Friday, 9 September, JSE-listed REIT, Octodec Investments Limited, visited the ACFS Kagiso centre on the West Rand for the official opening of the NPO’s first vegetable garden where Octodec has provided much needed shade netting and water tanks to help ensure the success of the project.
The team were heartily welcomed with performances by the choir, gumboot dancers and drum majorettes from the youth development programme.
Support provided
This is the third community in which Octodec has assisted in making the food garden more sustainable by providing shade netting and water tanks.
Caregivers, grandmothers and other volunteers use the food from the communal vegetable gardens to prepare meals for the children. The centre also assists parents in growing their own vegetable gardens so that they can feed their own families.
Malnourished children and even those experiencing short-term hunger have limited capacities to learn. To mitigate this, the ACFS Kagiso Centre supports over 215 children from preschool to Grade 12 per day and reaches over 1200 people from disadvantaged backgrounds in the area.
The Kagiso Centre is also the first centre where Octodec sponsored the youth economic empowerment programme by supplying the necessary equipment and apparel for a band, choir and traditional dance groups, both male and female. The group of 67 girls and 32 boys involved perform and speak at schools in the area to promote and expand the initiative.
The NGO – African Children’s Feeding Scheme (“ACFS”)
As part of Octodec’s socio-economic development programme, they have identified NPOs that support underprivileged families and promote education. ACFS are championing this cause.
Established in 1945, the ACFS is a registered Non-Profit Organisation dedicated to developing and protecting children and their families by focussing on improving access to nutrition, health, early learning and stimulation, and skills development.
The Kagiso Centre is one of the nine community centres providing children with a meal after school and other programmes through the ACFS.
Why Octodec cares
School feeding programmes lead to greater enrolment in schools and improve the ability to learn. By preventing poverty in childhood, we can help prevent the reinforcement of poverty across generations.
As part of Octodec’s vision to ensure a positive impact on its communities and the environment in which it operates, supporting causes like the ACFS helps create a better social fabric for the communities within and around Octodec operating areas.
