Octodec invests in the African Children’s Feeding Scheme

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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.

Octodec GCR credit rating

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Global Credit Ratings (GCR) reaffirms Octodec’s A- credit rating with a revised stable outlook

On Wednesday, 22 June 2022 JSE listed REIT Octodec Investments Limited announced that Global Credit Ratings (GCR) had reaffirmed Octodec’s A- credit rating with a revised stable outlook.

Shareholders and noteholders are advised that Global Credit Ratings (“GCR”) has undertaken 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 June 2022, 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 revised from Negative to Stable.

This revised outlook is indicative of the improved trading conditions for listed property owners with exposure to defensive sectors such as retail and residential in a post-Covid-19 environment and signals the prevailing positive sentiment for operators in the Tshwane and Johannesburg CBD’s.

GCR’s credit rating announcement is publicly available on GCR’s website at https://gcrratings.com/announcements/gcr-affirms-octodec-investments-limiteds-ratings-of-a-za-a2za-and-revises-the-outlook-to-stable-from-negative/.

Shareholders and noteholders can also contact Elize Greeff at elizeg@octodec.co.za to request an electronic version.

It starts with a meal

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As Corporate South Africa, we can no longer ignore the plight of millions of children who go to bed hungry every night across South Africa.

On 16 August, Octodec, with the help of City Property staff, came together at 012central to pack over 129 000 meals for Rise Against Hunger which will feed 500 children with five meals a week for an entire year!

The Covid-19 pandemic halted many in-person CSI initiatives and operations, so we were excited to finally roll up our sleeves and get back to being part of the solution by packing meals with our partners from Rise Against Hunger.

3.1 million children experience chronic hunger daily which has a devastating effect on brain development. 90% of brain development happens before the age of five, and further one in five South African children under the age of six are developmentally delayed.

Beyond the facts and figures regularly used to explain hunger, understanding the full extent of starvation and malnutrition can be daunting. We applaud the work Rise Against Hunger does to end hunger by empowering communities, nourishing lives and responding to emergencies.

For over five years we have been committed to his project, providing almost 630 000 meals in that time.  The meals are highly nutritious and comprise of rice, soya, dehydrated vegetable mix and fortifying minerals and vitamins, specifically formulated to combat malnutrition – and complies with the UNICEF standard. 

As was done in the past, the meals will be distributed to early childhood development centres across Gauteng through the Rise Against Hunger network. This food drive serves as an imperative reminder of what can be accomplished when Corporate South Africa comes together for the greater good.

Octodec upgrades landmark Shoprite building

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The Company signals its commitment to the CBD through multi-faceted enhancements to an already dominant inner-city retail and residential portfolio

JSE listed REIT, Octodec Investments Limited, today announced that it has commenced upgrading its Shoprite building in the heart of the Tshwane CBD, at a cost of just below R60 million. The facelift is a welcome boost to the existing, bustling retail trade in the CBD, and proves renewed confidence in a node which has clearly emerged stronger post the Covid-19 pandemic.

Jeffrey Wapnick, MD of Octodec, says: “With many retailers having returned to the CBD and various in-person university classes resuming, Octodec’s CBD retail assets are experiencing a renewed energy. We are thrilled to announce the news of this project, highlighting that the heart of Tshwane is still thriving and a vibrant place to be.”

The first phase will be a revamp of the 4000m² Shoprite supermarket and includes a new Shoprite Liquor and new retail shops on the ground floor. The most prominent visual element will be a triple volume entrance with escalator access from Helen Joseph Street. The escalators will lead downwards to an OK Furniture store. In addition, the project includes renovations to the Helen Joseph Street façade, including a new modern shopfront.

The second phase of the renovation will cater for more retail tenants on the ground floor and the remainder of the basement space. Negotiations are well underway with prospective tenants. Further upgrades include the pedestrian access point from Madiba Street, which will be upgraded to provide a landscaped walkway for easy access to the Shoprite store.

“We enjoy deep, mutually beneficial relationships with our tenants, who often provide great insights. It is unlikely they would invest in the CBD without a positive outlook. We are seeing these same tenants lease for longer periods which further underpins their confidence in the CBD long-term. Confidence from our tenants and improved market conditions have spearheaded growth within the CBD, which Octodec will certainly benefit from.” concludes Wapnick.

Shoprite will continue to trade during the duration of the upgrade. The project is expected to be completed in December 2022.

Octodec donated 500 Dignity Packs to Unchain Our Children

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Octodec, sister company of City Property, donated 500 Dignity Packs to Unchain Our Children

Watching a crane at City Property Pretoria lowering 500 dignity packs for boys, girls, and women into Unchain Our Children’s trailer Tuesday morning, was watching many prayers being answered in front of our eyes. Top quality personal hygiene items, soft toys, sweeties, towels, and facecloths were among the carefully selected items were packed by the staff for distribution among abused children and survivors of gender-based violence.

As statistics are skyrocketing and cases of child abuse, neglect, abandonment, exploitation, and trafficking are being reported daily, Octodec dignity pack brings joy to these survivors as they realize someone is caring enough to have blessed them with a beautiful gift of something special just for them.

Wayne van Onselen, Founder and Executive Director Unchain Our Children was invited to meet with the Managing Director of Octodec, Mr Jeffrey Wapnick. Mr Wapnick has a quest for inner city revival and rejuvenation. His management team shared with us their Change Our City For Good campaign and every story was alive with passion, enthusiasm and dedication describing their projects focussing on the upliftment of the vulnerable in our society.

“Make it Happen”, is the motto of Mr Wapnick. We were privilege to have experienced not only his dynamic business demeanour but also his sincerity and dedication to give back to the community. An accomplished entrepreneur, his vision for mid-city make-overs exceeds all expectations.

With an impressive portfolio of commercial-, industrial-, retail-, office and apartment properties in Pretoria and Johannesburg, Octodec is celebrating more than 50 years of providing beautiful spaces for living life.

Octodec Announces HY2022 Results

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Octodec’s digitalisation initiatives yield benefits as the Group broadens its residential offering and continues to pay down debt

The Group’s balance sheet optimisation and disposal strategies have also borne fruit in an improved half-year performance characterised by reduced vacancies and renewed tenant interest.

Highlights:

  • R944.4 million rental income (28 February 2021: R898.7 million)
  • Like-for-like rental growth 1.2% (28 February 2021: (8.5%))
  • Distributable income after tax (FFO) R211.8 million (28 February 2021: R199.1 million)
  • Distributable income per share 79.6 cents (28 February 2021: 74.8 cents)
  • Net asset value (NAV) per share R23.10 (31 August 2021: R23.20)
  • Cash generated from operating activities before dividend payment R193.9 million (28 February 2021: R184.3 million)
  • Loan to value (LTV) 41.0% (31 August 2021: 43.2%)
  • All-in annual weighted average cost of funding 8.3% (31 August 2021: 8.5%)

Tuesday, 10 May 2022 – JSE listed REIT Octodec Investments Limited, today announced its interim results for the six months ended 28 February 2022, against the backdrop of subdued market recovery. While the fourth wave of Covid-19 (November 2021-January 2022) was expected to further slowdown the local economy, only minor restrictions were placed on tenants’ businesses resulting in a limited impact on Octodec’s portfolio. Consequently, fewer rental discounts were granted to tenants over the period.

Revenue earned on a contractual basis after COVID-19 rental discounts increased by 5.1% to R944.4 million from R898.7 million. At the same time, property operating expenses increased by 5.2%, mainly due to increased administered costs such as assessment rates. The group’s bad debts remain under control at 1.9% of gross revenue compared to 2.5% for the prior period.

Speaking to various operational initiatives during the year, Jeffrey Wapnick, Managing Director of Octodec, says: “Octodec has managed to contain most property costs through hands-on management of the buildings, with a focus on maintenance management, ensuring that our buildings remain attractive to its tenants.”

Portfolio

Initiatives such as the introduction of shared and/or furnished accommodation at The Fields and value-added services such as Wi-Fi to tenants in various other buildings has contributed to the increase of Octodec’s residential income by 5.6% on a like-for-like basis. This, together with a focused marketing strategy to increase letting, has also resulted in reduced vacancies in our residential buildings.

Explaining actions taken to retain and attract tenants, Wapnick comments: “There is increased residential supply by competitors in Johannesburg CBD, which is why we are maintaining our competitive edge by providing quality apartments and services at affordable prices, which has been done without major CAPEX. Due to the positive outcome of the above initiatives, we intend to roll out these programmes aggressively to more residential buildings to attract new tenants.”

The residential vacancies decreased to 7% since February 2022. Subsequent to half-year, the occupancy level improved considerably at The Fields with the students’ take-up of shared/furnished accommodation, and at Kempton Place through the increased activity at OR Tambo International Airport, with both ex- and new tenants returning to take up occupation.

Over the last two years, Octodec’s retail portfolio has felt the impact of the lockdown restrictions. Many offices and government departments are still applying the work-from-home policy, at least on a rotational basis. Therefore, footfall has not returned to pre-COVID levels in the CBDs. Nevertheless, on a like-for-like basis and excluding COVID-19 rental discounts, rental income from retail increased by 4.0%.

Wapnick says: “Although there has been a continued downward resetting of rentals across the sectors, it is pleasing to see that from an Octodec perspective, several renewals are being concluded at increased rentals, and we continue to experience demand from large retailers for space in both Johannesburg and Tshwane CBDs.”

Educational facilities and Places of worship are experiencing increased student numbers and congregants respectively. However, the period was characterised by challenging trading conditions and these institutions are only beginning to emerge from the pandemic. Encouragingly, there has been an improvement with new inquiries and collections from these two sectors.

Octodec’s office portfolio has also been adversely affected by the current weak economic climate. In addition, the oversupply of office space has put pressure on occupancy levels, which is in line with the broader sector. Although vacancies have remained stable, rental income has reduced marginally by 1.5% on a like-for-like basis and before COVID-19 rental discounts.

Octodec’s industrial portfolio has performed relatively well. However, there have been negative rental reversions and a resetting of rentals. As a result, rental on a like-for-like basis and before COVID-19 rental discounts decreased by 4.5%. Occupancy in the industrial sector has remained stable, with a number of our industrial buildings 100% occupied.

Wapnick adds: “Even though Octodec’s properties were not directly impacted by the civil unrest in 2021, the impact of the unrest on the economy partially affected Octodec’s collections during this period.”

Vacancies

As a percentage of gross lettable area, including properties held for redevelopment, vacancies have improved marginally to 22.6% compared to 22.8% at 31 August 2021. The group’s core vacancies, which exclude the GLA relating to properties held for redevelopment or disposal, decreased from 16.2% to 15.8%.

The residential sector reflected a considerable decrease in vacancies compared to August 2021. Residential vacancies reflect an improvement from 24.3% at February 2021 to 15.4% at 28 February 2022. Despite pressure on rental income in the industrial sector, the vacancies have decreased from 11.7% to 9.9%. Retail shopping centre core vacancies also improved from 7.3% to 6.0%, with Octodec’s convenience shopping centres being well let.

Disposals

“Octodec remains focused on its balance sheet optimisation, and disposal strategies to pay down debt and refinance loans where needed. Active balance sheet management and liquidity planning have shielded the business resulting in an improved LTV,” comments Anabel Viera, Financial Director of Octodec.

With the lifting of COVID-19 lockdown restrictions, Octodec has seen an improvement in the conclusion of sales of properties previously identified for sale. Against this backdrop, Octodec has sold and transferred 12 properties for a total net consideration of R121.6 million.

Dividend

The board of Octodec has declared a cash dividend of 50 cents per share for the year ended 28 February 2022. However, given the broader economic and political uncertainty, the board will not be providing any guidance on distributable income and dividends for the second half of FY2022.

Speaking to prospects in the sector, Wapnick concludes: “Consumer confidence has risen in light of the cancellation of the lockdown restrictions, and there is a renewed energy in the Tshwane CBD. However, the local macro environment remains a cause for concern. With GDP expected to grow at under 2% for the foreseeable future, we do not anticipate significant growth in rental income. In addition, inflation is also expected to increase, which will also impact our costs and ultimately, net property income. With that said, Octodec remains resilient thanks to Management’s intimate knowledge of the underlying assets in the portfolio and the broader property market.”