Octodec Investments’ Yethu City on Sisulu has added another accolade to its growing list of achievements, winning the Residential Development Category at the 2026 SAPOA Property Development Awards for Innovative Excellence.

The award recognises the successful transformation of a largely vacant 1940s office building in Pretoria into a thriving, technology-enabled co-living development, demonstrating how adaptive reuse can unlock commercial, environmental, and social value while responding to evolving urban living needs.

 

 

Developed and managed by City Property for Octodec, Yethu City on Sisulu transformed an underutilised commercial property into a contemporary residential offering aimed at students, young professionals, and first-time renters.

Rather than demolishing the existing structure and building anew, the development retained and repurposed the asset, significantly reducing construction waste and embodied carbon while giving the property a sustainable new lease on life.

The project reflects Octodec’s approach to unlocking value from existing assets by looking beyond their historic use and reimagining them for changing customer needs. By combining thoughtful design, technology and sustainability considerations, older buildings can be repositioned to create entirely new opportunities.

Yethu City on Sisulu provides 196 beds across approximately 3,535m² and achieved full occupancy within three months of launch, demonstrating strong demand for well-located, affordable, and professionally managed accommodation.

Its design embraces a philosophy of strategic simplicity. Existing concrete, exposed services, and structural elements were incorporated into the building’s contemporary industrial character, while communal kitchens, co-working areas, social spaces, a rooftop gym, and other shared amenities provide residents with a broader lifestyle offering at an accessible price point.

Technology is central to the development model. Biometric facial-recognition access, smart utility metering, a digital tenant platform, and QR-enabled water management systems have been integrated to enhance security, operational efficiency, and the resident experience. Sustainability features, including solar-hybrid energy systems and heat-pump technology, further contribute to resource efficiency, with the water-heating system reducing energy consumption by up to 60%.

For Octodec, Yethu City demonstrates how adaptive reuse can simultaneously address social, environmental, and commercial objectives. By bringing a previously underutilised property back into productive use and providing quality accommodation close to employment opportunities, educational institutions, and public transport networks, the development creates value for residents while supporting broader precinct development objectives.

The SAPOA recognition reinforces the potential of this approach to be replicated across suitable parts of Octodec’s portfolio as the Group continues to explore innovative ways of repositioning assets in response to changing customer needs and market dynamics.

The award also builds on a series of industry recognitions received by Yethu City, including EDGE Advanced certification from the IFC and recognition at both the 2025 API Summit and 2026 Reside Summit. Together, these acknowledgements reflect the development’s success in combining adaptive reuse, sustainability, innovation, and customer-focused design.

More than an award-winning development, Yethu City serves as a blueprint for how existing buildings can be reimagined to create vibrant spaces where people can live, work, and connect, while unlocking new value from underutilised assets.

Octodec is proud to announce that Yethu City on Sisulu has achieved EDGE Advanced accreditation, becoming the first property in the Octodec portfolio and under City Property’s management to receive green building accreditation.

 

 

Located in Pretoria’s CBD, Yethu City recorded:

 

• 69.12% energy savings
• 33.23% water savings
• 95% less embodied carbon in materials

 

EDGE, which stands for Excellence in Design for Greater Efficiencies, is a globally recognised green building certification system developed by the International Finance Corporation, a member of the World Bank Group. EDGE Advanced recognises buildings that achieve at least 40% on-site energy savings, in addition to meeting the required standards for water efficiency and embodied carbon in materials.

 

Yethu City’s achievement is particularly significant given the nature of the development. The property transformed an existing building into a modern co-living environment designed for young professionals, first-time renters, and commuters. It combines affordable accommodation with shared social spaces, co-working facilities, smart technology, and resource-efficient systems.

 

The accreditation demonstrates how the thoughtful repurposing of existing buildings can support inner-city renewal while delivering measurable environmental benefits. By retaining and adapting existing structures, improving operating efficiencies, and using materials more responsibly, property owners can reduce environmental impact while extending the productive life of urban assets.

 

“Achieving EDGE Advanced accreditation is an important milestone for both Yethu City and Octodec,” says Riaan Erasms, Deputy Chief Executive Officer and Financial Director of Octodec Investments. “It validates the care and innovation that went into the redevelopment and demonstrates that affordable inner-city accommodation can also meet exacting international sustainability standards. We are immensely proud of the City Property team and everyone involved in bringing this vision to life.”

 

Yethu City has already received significant industry recognition for its innovative approach to affordable urban living. The development received the Platinum Award for Affordable Multi-Family Residential Project 2026 at the Reside Awards and was previously named Best New Affordable Housing at the Africa Property Investment Awards.

 

Its EDGE Advanced accreditation adds another important dimension to that success, recognising the building’s environmental performance alongside its contribution to quality, accessible, and community-focused accommodation.

 

For Octodec, the achievement represents an encouraging step in the Group’s ongoing efforts to improve the resilience, efficiency and long-term sustainability of its portfolio. It also reinforces the important role that responsible investment and adaptive reuse can play in revitalising South Africa’s inner cities.

Johannesburg, 27 July 2026 – Octodec Investments Limited and Rise Against Hunger Africa have together reached a milestone of delivering over one million nutritious meals to vulnerable children and early childhood development (ECD) centres. This achievement reflects 10 years of dedicated support from Octodec in its commitment to fighting child malnutrition and investing in the sustainability of ECD centres, especially in its surrounding communities.

 

 

Key highlights

 

• One in four South African children under five are malnourished, requiring nutrition interventions
• Over one million meals have been packed since 2017, through a partnership backed by approximately R3.3 million in overall investment from Octodec Investments Limited
• The partnership’s annual meal contribution is equivalent to providing nutritious meals to approximately 435 children every school day for a full school year
• Nutritious support from Octodec created approximately R1.4 million in food cost savings for beneficiary early childhood development (ECD) centres

  

According to UNICEF, 23% of children in South Africa live in severe child food poverty, placing them at greater risk of life-threatening malnutrition and related health complications. This crisis has lasting consequences: almost three in every 10 children under the age of five are affected by stunting, which can impair both physical growth and cognitive development.

 

Every year since 2017, over 400 Octodec and City Property employees have gathered during Nelson Mandela Month to pack an average of 100,000 meal packs. These contain rice, soy, dehydrated vegetables, and essential vitamins and minerals designed to support healthy growth and development for children in ECD centres across the country.

 

This July, 485 employees joined the annual event to push the total number of meals packed over the duration of the partnership to over one million. To celebrate this milestone, Rise Against Hunger Africa presented Octodec with a special commemorative plaque in recognition of its longstanding support during its meal-packing event on Friday.

 

Since the partnership’s inception, the broader impact shows that, through Octodec’s support, over 400 children have had a meal every school day for a full school year. This has been made possible through its annual support of approximately R400,000, resulting in a total investment of over R3.3 million to support children and ECDs.

 

Lisa Carne, Head of Sustainability at City Property, said, “Over a million meals packed is an important milestone, but the real measure of success is the impact. We are proud that every year, our employees continued to play their part in increasing the number of children who are healthier, better nourished, and better positioned to learn because of the sustained support and partnership with Rise Against Hunger.”

 

Rise Against Hunger Africa’s partnership with companies such as Octodec has also helped support underfunded ECD centres, many of which do not qualify for government support. By easing the financial burden of providing nutritious meals, the partnership allows centres to invest in facility upgrades and improvements needed for registration, sustainability, and better learning environments. To date, Octodec’s support has generated an estimated R1.4 million in savings for beneficiary ECD centres.

 

“Food insecurity and child malnutrition is a complex and growing challenge, and having a dedicated partner such as Octodec shows why long-term partnerships are important. The consistency makes a difference. Their continued support and dedication over the years has helped us reach more children, support more ECD centres, and create much-needed impact year after year in many communities,” added Brian Nell, CEO of Rise Against Hunger Africa.

 

 

This partnership forms part of Octodec’s wider food security CSR focus, which includes the Feed the Future and Unity Meals programmes, collectively helping millions of meals reach vulnerable children each year.

Key highlights

• Revenue increased by 2.1% to R1.08 billion
• Like-for-like rental growth of 3.4%
• Distributable income per share (DIPS) up 11.1% to 92.6 cents
• Dividend per share increased by 4.0% to 64.5 cents
• Net property income (NPI) up 1.9%
• Collections remained strong at 98.5%
• Core vacancies improved to 13.1% (HY2025: 13.7%)
• Loan-to-value (LTV) reduced to 37.3%
• 10 non-core properties disposed of for R89 million at a 7.6% exit yield

Johannesburg, 12 May 2026 – Octodec Investments Limited (“Octodec” or “the Group”) today announced its interim results for the six months ended 28 February 2026 (“HY2026”), reflecting continued progress in simplifying the portfolio, recycling capital, and improving earnings quality.

 

Clear progress against strategic priorities

The Group delivered double-digit growth in distributable income, supported by improved funding costs, strategic asset sales, stable property income, and continued leasing momentum across key segments.

Chief Executive Officer, Jeffrey Wapnick, said:

“We are seeing the benefits of a focused strategy coming through in our results. The business is becoming more streamlined, more efficient, and better positioned for growth as we actively reshape the portfolio and redeploy capital.”

Strategy in action and portfolio performance

Octodec continued to make meaningful progress in reshaping its portfolio through an active disposal and reinvestment programme. During the period, the Group disposed of 10 non-core properties for R88.7 million, while also announcing the disposal of Killarney Mall for R397.5 million, subject to conditions. These transactions form part of a broader initiative to reduce exposure to smaller, non-core and underperforming assets, while redirecting capital into larger, higher-quality opportunities with stronger income potential and scalability.

Deputy CEO and Chief Financial Officer, Riaan Erasmus, commented:

“We are making steady progress in reducing the long tail of smaller assets and concentrating the portfolio around properties that offer scale, stronger income profiles, and long-term relevance.”

This repositioning is supported by a solid balance sheet. The Group’s loan-to-value (LTV) ratio improved to 37.3%, comfortably within the targeted range, while R1.1 billion in available facilities provides flexibility to support ongoing capital allocation. Refinancing during the period was achieved at more favourable margins and tenor, contributing to improved funding efficiency.

 

Solid operational performance

Operationally, the portfolio continues to perform steadily. Rental collections remained strong at 98.5%, reflecting consistent tenant engagement and cash flow stability, while vacancies trended down, particularly within the residential portfolio. Performance across the core asset base remained stable despite a mixed operating environment.

Within the portfolio, residential remains a key contributor, supported by sustained demand for well-located, affordable accommodation. Rental income increased by 5.5% during the period, vacancies reduced to 7.7%, and like-for-like rental growth of 5.7% reflects improved occupancy levels, steady rental escalations, and targeted asset enhancements.

“Demand for well-located, cost-effective accommodation remains a key underpin of our performance, particularly in our core Tshwane portfolio,” Wapnick adds.

The retail portfolio showed encouraging signs of stabilisation, with street retail performance beginning to recover in key nodes, including Johannesburg, supported by improving footfall and trading conditions. Shopping centres delivered like-for-like rental growth of 7.7% with the portfolio (excluding Killarney Mall) effectively fully let.

The office portfolio remained broadly stable, with management continuing to assess select assets for potential disposal or conversion. This forms part of a broader approach to unlocking value through repositioning and repurposing. Meanwhile, the industrial portfolio delivered steady growth, with rental income increasing by 6.8%, supported by continued demand for smaller warehouse and mini-industrial space.

 

Unlocking Octodec’s Growth Pipeline: Yethu City

Yethu City continues to demonstrate strong demand and operational success, reinforcing its role as a key strategic platform for future growth. The development was fully let within 3.5 months of launch and has maintained near- to full occupancy, while also being recognised as the Best New Affordable Housing Development at the 2025 API Summit Awards. Its success is underpinned by an integrated offering combining co-living design, smart technology, and community-focused planning.

Building on this success, Octodec is actively progressing opportunities to expand the Yethu City concept. The Group has identified a pipeline of potential conversion opportunities within its existing portfolio and is engaging with funding and development partners to support future rollout. Ongoing feasibility work continues to support the scalability of the model.

“As we streamline the portfolio, we are creating capacity to reinvest into scalable formats that align with structural demand in the urban housing market,” Erasmus adds.

Capital allocation remains closely aligned to these priorities. During the period, R71 million was deployed into capital projects, focused on yield-enhancing upgrades, energy and water resilience initiatives, and improvements to tenant experience. Recent solar installations returned approximately R5.2 million in cost savings for the period. Proceeds from disposals continue to support reinvestment while maintaining balance sheet flexibility.

 

Outlook

Looking ahead, Octodec’s medium-term focus remains on further simplifying the portfolio, accelerating disposals, and reallocating capital into higher-quality, scalable assets, while increasing exposure to defensive, high-demand sectors and improving earnings quality over time.

The Group remains constructive on the outlook, supported by improving macroeconomic conditions, continued demand for affordable and well-located space, and a clear pipeline of strategic initiatives. Octodec has upgraded its guidance for the 2026 financial year, expecting distributable income and distributions to grow by between 3% and 5%.

“Execution is increasingly visible in the shape of the portfolio and the quality of earnings. We are encouraged by the momentum in the business and the opportunities ahead. With a clearer, more focused portfolio, we believe Octodec is well positioned to build on this trajectory,” concludes Wapnick.

• • Revenue grew 4.6% to R2.2 billion, with all sectors contributing to the growth

• • Core vacancies reduced to 12.3% with improved occupancies across all sectors

• • Solid progress made against asset recycling programme, 17 properties sold

• • Funding facilities refinanced at improved margins and LTV reduced to 38.2%

• • Total dividend 7.6% higher at a payout ratio of 78.4%

• • Yield enhancing solar projects contributed to cost savings with further investments made

• • Yethu City pilot project met with success on launch and a blueprint for future conversions

• • Strategy refreshed including focused portfolio rationalisation to enhance future returns

 

Tuesday, 25 November 2025 – JSE-listed REIT Octodec Investments Limited today announced its annual results to 31 August 2025, reporting growth in distributable income per share of 8.2% on the back of a resilient portfolio performance. The board declared a final dividend of 72.5 cents per share, taking the total dividend for the year to 134.5 cents, a 7.6% increase on the prior year.

Commenting on the results, Jeffrey Wapnick, Octodec CEO says, “I’m proud of the progress achieved this year. Focused strategic actions and disciplined execution saw us grow rental across all sectors, meaningfully improve occupancies, secure lower funding rates, reduce debt and enhance the portfolio to drive sustainable value creation. Despite facing familiar challenges, renewed market confidence, lower inflation and declining interest rates created a more favourable operating environment which supported the overall strong performance.”

 

The portfolio, valued at R11.2 billion delivered revenue growth of 4.6% at R2.2 billion, with all sectors contributing to the increase, although residential and shopping centres were the strongest performers. Total core vacancies decreased from 14.9% to 12.3%, while collections remained strong at 99% of total billings and reversions moved in the right direction. Costs were tightly managed with the focus being on containing them below or in line with inflation. Net property expenses recorded an increase of 4.1%, driven mainly by above inflation increases in utilities, cleaning, and security costs, as well as bad debt provisions. Administrative and corporate expenses increased by 4.9% while net finance costs were just 0.6% higher, owing to maturing interest rate swaps, offset by improved margins on refinanced borrowings.

 

The Lilian Ngoyi Street in the Johannesburg CBD remained under repair for the full financial year. This negatively affected both the retail street shops and residential sector performances due to tenants of the 14 directly impacted properties having limited accessibility and being unable to trade effectively. The street was however reopened on 12 September 2025, with management optimistic about the prospects of improved trading conditions as footfall and buying patterns gradually recover.

 

Unpacking the sector performance

The residential portfolio achieved a decrease in vacancies from 9.2% to 8.0% and a 5.4% increase in rental income. Improved occupancy at The Fields which benefitted from an increase in the NSFAS accommodation allowance and pre-approval of NSFAS funded students had a tangible impact.

 

Octodec’s well located, secure, and well-maintained residential properties remain in high demand with the shortage of quality accommodation at affordable prices creating opportunities for Octodec to convert underperforming offices into residential or mixed-use assets.

 

The successful launch of Octodec’s communal living pilot project, Yethu City – on Sisulu, is an exciting case in point. The new product, offering a lower entry market rental, sustainability and tech-enabled features was well received, reaching full residential occupancy within ten weeks. The award-winning pilot has demonstrated strong potential for replication and scale as Octodec continues to innovate to address evolving market needs.

 

The portfolio of largely convenience shopping centres recorded significantly reduced core vacancies of 6.9% (FY2024: 10.0%) or 0.5% when excluding Killarney Mall which was held for sale during the period. Rental income, including Octodec’s joint venture, showed pleasing growth of 6.2%, reflecting active tenant mix management and robust demand for this retail category.

 

Octodec’s 50% joint venture Blaauw Village, a neighbourhood shopping centre in Pretoria North, performed exceptionally well, delivering an 81.8% increase in income, mainly due to rental income growth and cost efficiencies.

 

In Johannesburg, Octodec’s distinct portfolio of street retail remained challenged by tenant sustainability linked to pressure on consumers’ real disposable income and compounded by the impact of the unrepaired damage on Lilian Ngoyi Street. Rental income accordingly increased by 1.2% or 2.0% on a like-for-like basis while core vacancies declined from 14.0% to 12.0%.

 

Although the office sector remained under pressure with vacancies persisting, smaller, affordable spaces continued to attract niche operators and small businesses with Octodec’s strategy to repurpose underutilised office buildings in selected locations proving successful. Core vacancies decreased from 24.3% to 20.8%, partially due to the disposal of a property in Johannesburg while rental income increased by 4.9% or 8.0% on a like-for-like basis, helped by lease adjustments relating to certain government renewals.

 

Octodec’s industrial portfolio showed resilience, supported by steady demand for smaller, flexible spaces suited to SMEs. Core vacancies declined from 10.0% to 5.6%, mainly driven by the letting of several larger spaces. Rental income increased by 2.4% or 6.1% on a like-for-like basis, constrained by broader affordability pressures.

 

Executing the capital recycling and portfolio enhancement strategy

During the reporting period, Octodec invested R102.5 million in developments, improvements and larger tenant installations which will support increased earnings.

 

Most notable of these, is the completion of Yethu City – On Sisulu at a cost of R45.5 million, with R27.3 million incurred during the reporting period. The estimated marginal yield is between 11.0% and 12.0% and is expected to be enhanced by electricity cost savings from the solar power installation. Octodec invested R10.6 million in a sizeable yield accretive solar project at its largest asset, The Fields, with the project completed in July 2025. A further R10 million was spent on five solar projects and R10.6 million on energy efficiency management initiatives.

 

During the year, 17 non-core smaller properties were sold for total net proceeds of R152.3 million, at a weighted average exit yield of 9.5%. One small property, which is complementary to the Rentmeester Office Park, was acquired for R8.0 million, with a first-year yield of 9.3%.

 

Prudent management of borrowings and cash flow

R1.6 billion of bank funding was successfully refinanced and R155 million in unsecured corporate bonds were issued, all at improved margins, with tenors ranging between three to five years. Octodec’s hedged position was carefully managed throughout the reporting period to benefit from lower interest rates, ending the year at 71.9% of borrowings.

 

Proceeds from the disposal of properties were applied towards debt, reducing outstanding borrowings from R4.4 billion to R4.3 billion. The reduction in borrowings, together with a slight increase in the portfolio value led to a decrease in the group’s LTV from 39.2% to 38.2%. The all-in weighted average cost of borrowings declined from 9.5% to 9.1% and Octodec ended the period with unutilised available banking facilities of R800 million. A further R200 million in unsecured corporate bonds was raised post-year end.

 

Riaan Erasmus, Deputy CEO and Financial Director highlights, ”Strategic asset recycling and disciplined treasury management were key to delivering these results and to strengthening Octodec. Guided by our refreshed strategy we look forward to building on this momentum as we shape the portfolio to deliver greater value.” 

 

Strategic focus and prospects for the year ahead

In August, Octodec’s board approved a refreshed strategy to guide the Group’s priorities over the coming years. A key pillar of the strategy is a more resolute but responsible rationalisation of the property portfolio and consideration of the nodes in which Octodec invests, to focus asset management on a portfolio that can yield increased returns. This will be complemented by a newly approved sustainability strategy which includes initiatives to access sustainable financing.

 

In line with the strategy, five additional properties were disposed of post year-end at a gross consideration of R48.4 million (excl. VAT), while management remains intent on executing the sale of Killarney Mall.

 

The relatively stable political environment, lower inflation and potentially lower interest rates following the reduction in the long-term CPI target, as well as South Africa’s removal from the FATF grey list, should provide further impetus for growth at both a macro and Octodec level.

 

Despite these tailwinds, economic pressures remain and FY2026 presents Octodec with the added challenge of addressing large vacancies which recently materialised at two buildings (together 18 959m²). The Yethu City concept is actively being explored as a potential solution for the one building (12 086m²) while management is marketing the other building for relet and considering its disposal. As a consequence of these vacancies, Octodec expects to achieve growth in distributable income and distribution per share of between 0.0% to 4.0% in FY2026.

 

”While pressures remain in the year ahead, we are encouraged by Octodec’s trajectory and are increasingly confident in the outlook. I believe the future holds promise, and that Octodec is well positioned to capture new growth opportunities and enhance future returns,” concluded Wapnick.

• Revenue grew 5.2% to R1.1 billion
• Core vacancies reduced to 13.7% with all sectors contributing to the improvement
• Cash generated from operations up 25% to R270 million
• Distribution per share 3.3% higher at 62.00 cents
• Executed the sale of ten properties aligned with the portfolio recycling strategy
• Yield-enhancing solar projects rolled out at two key assets
• Pilot project Yethu City launched to high market demand with residential units 97% let

Tuesday, 13 May 2025 – JSE-listed REIT Octodec Investments Limited, today announced its interim results for the six months ended 28 February 2025, reporting a resilient performance across its Gauteng-based portfolio, despite a challenging market context.

Building on early signs of economic recovery, Octodec management focused on soundly managing the portfolio and the Group’s value proposition, reducing vacancies and disposing of ten non-core assets.

A highlight for the period was the completion of and successful launch of Yethu City – on Sisulu in mid-February 2025. This redevelopment pilot project exemplifies Octodec’s ability to address market needs by introducing quality, accessible co-living accommodation to the Pretoria CBD. The letting rate exceeded expectations, with the residential occupancy reaching 40.7% by end February 2025 and currently nearing 100%.

Commenting on the results, Jeffrey Wapnick, Octodec MD says “We are pleased to have grown our rental income and dividend despite a challenging operating environment, reflecting the stability of our portfolio and the effectiveness of our strategic initiatives. We remain committed to managing our portfolio in alignment with market demand, while supporting long-term sustainability and driving value creation. We are thrilled about the successful launch of Yethu City as part of our efforts to provide well-priced, quality accommodation and unlock new opportunities for growth and enhancement of returns.”

Portfolio performance 

The overall portfolio, valued at R11.3 billion, delivered revenue growth of 5.2% at R1.1 billion, and a reduction in core vacancies to 13.7%, largely driven by improved performances from the Shopping Centre and Office portfolios.

Octodec’s portfolio of retail shopping centres, anchored by a strong base of convenience centres, recorded core vacancies of 0.8%, when excluding Killarney Mall which is held for sale. The portfolio achieved solid rental income growth of 6.2% to R91 million, reflecting management’s yield-enhancing actions, and robust demand for this retail category.

Rental income from retail street shops rose by 1.4% on a like-for-like basis while the strategic disposal of properties with high vacancies supported an improvement in occupancy from 86.0% to 87.4%. The Group acknowledges the impact of macroeconomic challenges and infrastructure constraints on this retail segment – most notably the Lilian Ngoyi Street that is currently under repair in the Johannesburg CBD, which contributed to elevated core vacancies of 21.9% at these affected properties.

Octodec’s office portfolio performance showed some green shoots, recording encouraging like-for-like rental income growth of 6.4% to R151 million, when excluding a net lease adjustment applied in the comparative period. Core vacancies improved slightly from 24.3% to 23.4%. Management continues to proactively manage underperforming assets through disposals and strategic conversions.

Octodec’s residential portfolio recorded above-inflation rental income growth of 5.1% on a like-for-like basis. Vacancies ended slightly above the comparative period at 8.4%, however were below the FY24 figure of 9.2%.

The Hatfield properties benefitted from pre-approval of NSFAS funded students and the enhanced amenities for students, recording a notable decline in vacancies of 3.1 percentage points. The introduction of the Yethu City co-living offering, aims to address affordability constraints and capture the vast demand for quality accommodation in this market.

The industrial portfolio consisting of smaller warehouses and light industry performed well, delivering rental income growth of 5.1% on a like-for-like basis and reduced vacancies of 8.7%.

Disposals and Capital Investment

In line with its strategy to exit non-core properties and redeploy the capital more advantageously, Octodec sold ten non-core properties at a weighted average exit yield of 8.4%, receiving R49 million in net proceeds. Several capital investment projects were undertaken during the period, most notably the installation of solar panels at The Fields and The Park Shopping Centre, which is expected to yield significant returns and enhance both the value and appeal of the properties. Smaller value-enhancing projects included the upgrade of Waverley Plaza, improvements at government-tenanted Rentmeester Park and at the historic landmark building, Bank Towers, where Octodec welcomed a new look Jet store.

Prudent financial management

Cash generated from operations (before dividends) was 25% higher at R270 million. The group’s total borrowings ended the period at R4.4 billion and the LTV was reduced to 38.5%. Effective 30 November 2024, R970 million in funding was refinanced at improved margins with tenors of three to four years. The weighted average cost of funding ended the period slightly higher at 9.4% as a result of expired interest rate swaps. Management is proactively negotiating the refinancing of a further R650 million of debt maturing end August 2025. At the end of the reporting period, borrowings were 51% hedged and within the Group’s hedging target of between 50% to 60% in the short to medium term. The Group ended the period with R692 million in cash and unutilised banking facilities which is sufficient for its capital commitments.

Outlook and prospects 

The formation of the Government of National Unity (GNU) has lifted market sentiment and together with interest rate cuts has improved the operating backdrop. These developments have already supported disposal activity and offered relief to small businesses, while presenting opportunities to lower Octodec’s funding costs, improving the potential for value-accretive reinvestment. While the lingering effects of the Lilian Ngoyi Street gas explosion and persistent unemployment continue to weigh on parts of the portfolio, management remains focused on tenant support, claim recovery, and adaptive asset management. However, heightened geopolitical risks, a material government lease termination, and uncertainty tied to the sustainability of the GNU, have prompted a more cautious outlook.

Riaan Erasmus Deputy CEO and FD adds, “We remain cautious in our interest rate outlook and focused on maintaining a disciplined balance sheet. As previously communicated, the Board has mandated a more assertive disposal strategy for non-core assets, where sales proceeds will be recycled into yield-enhancing investments or used to reduce borrowings, ultimately supporting income growth and strengthening the Group’s financial position. The early success of Yethu City underscores our strategy to reimagine underutilised assets to drive future returns.” Based on the economic outlook and caution surrounding geopolitical tensions, management has revised its guidance for growth in distributable income per share, to between 2% and 4% , while maintaining a minimum dividend pay‑out ratio of 75% of distributable income.