Growthpoint, SA’s largest real estate investment trust (Reit), is struggling to keep up with the demand for diesel used to power generators at offices in Gauteng as load-shedding climbed to stage 6 last week.
The challenge comes as tenants and their employees head back to the office a few days a week after two years of working from home during the pandemic. The return to the office should be good news for Reits, which have faced rising vacancies and declining rental yields.
But SA is facing the worst blackouts since 2019 as Eskom’s coal-powered fleet reaches the end of its life and workers last week went on an illegal strike.
Growthpoint’s head of asset management, Paul Kollenberg, said it owns 186 offices in Gauteng that have 1,000l diesel tanks that power generators for up to 12 hours. If load-shedding takes place at least six hours a day, tanks must be replenished every two days, which has proved a logistical challenge.
He said the problem is not confined to Growthpoint offices as diesel suppliers are servicing multiple buildings in Johannesburg amid unprecedented demand.
Bloomberg cited a Growthpoint letter to Johannesburg landlords that suggested there was a diesel shortage. “Our resources are stretched to their limits. Our diesel providers have exhausted their diesel supply,” the company said in the letter, dated Tuesday. “We kindly request that you make your own contingency plans to secure the integrity of your business and IT infrastructure.”
Kollenberg said the issue is related to the logistics of replenishing the supply at various buildings rather than a diesel shortage.
Growthpoint has its own 1,000l diesel truck, known as a bowser, that services offices in Sandton where it also has a refill point.
Johannesburg, the economic capital of SA, has been hit hard by power cuts, with cable theft during outages and ageing infrastructure worsening the blackouts.
As the Cape Town metro uses the Steenbras Dam to provide power, it experiences lower load-shedding stages than the rest of SA.
Growthpoint said it is not struggling to manage generators at its Gauteng shopping malls as landlords only provide power for common spaces. Many stores have their own generators and many shopping centres have installed solar panels.
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