Property group Safari Investments is in negotiations to sell the Soweto Day Hospital and Mnandi Shopping Centre in Gauteng, and wants to leave the Namibian market to focus on retail properties in semiurban and township areas.
The retail-focused real estate investment trust (Reit) said on Tuesday in its 2022 results that it wants to focus on higher-yielding retail opportunities.
All but six of the 36 residential apartments in The Pier that form part of the waterfront development Platz am Meer in Swakopmund, Namibia, have been sold.
“Safari is confident that the remaining units in stock will be sold during the 2023 financial year while the medium- to longer-term view is for Safari to exit Namibia and focus on the SA retail landscape,” CEO Dirk Engelbrecht said in the integrated annual report for the year to end-March.
Safari is valued at R1.772bn on the JSE. It owns nine properties, including shopping centres, apartments and a private day hospital. Most of the local properties are in Gauteng, with one in Limpopo.
Safari’s revenue leapt 21.4% to R416.15m. Operating profit is up 13.9% to R245.1m, but profit for the year fell 5.2% to R253.7m.
The company declared a final dividend of 32c, up 28% from last year, taking the total dividend for the year to 57c, a 35.7% increase.
The valuation of its portfolio rose 2.3% to R3.54bn and has 175,512m², about the size of 25 football pitches, in gross lettable area. The Denlyn Shopping Mall in Pretoria is the biggest one by rentable area with almost a fifth, followed by the Thabong Mall, Sebokeng.
The vacancy rate improved from 2.4% to 1.9% and tenant retention on lease expiries was 89%. The weighted average gross rental per square metre of its portfolio rose 14.8% to R171.
The Reit will pay out all of its distributable income vs the 91% in its 2021 financial year.
The company expects distributable income to grow 2%-6%, Engelbrecht said, as higher interest rates and uncertainty affect the economic climate with inflation high. Safari also identified significant increases in municipal rates and taxes, poor service delivery, political unrest and energy costs as a possible risk to it and its tenants.
Headline earnings per share (Heps) were up 68.4% to 64.27c.
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