The Week in Property

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Image credit: Spear REIT Limited

The JSE All Property Index closed at 7 376 last night, down by 0.46%.

The Capital Apartments and Hotel Group, one of the fastest growing local owner operated hotel and luxury apartment providers, dominated the news this week. Not only has it entered a seven-year lease agreement with Spear REIT for the 15 on Orange Hotel in Cape Town (with an option to buy and at a higher rental than is being paid by the current operator), but it has also emerged as the preferred bidder (at R240 million) for the five-star Fairmont Zimbali Hotel in KZN which entered business rescue last year. The Zimbali hotel acquisition is conditional upon the creditors’ acceptance of the business rescue plan and Competition Commission approval.

Texton Property Fund, the first local REIT to withhold its dividend payment for 2020, reported a 12.8% drop in distributable income for the six months ended on the 31st of December 2020. During the past six months the company focused on its balance sheet management by disposing of a further R139 million of its non-core assets. Texton’s board elected not to declare an interim dividend, deferring this decision to year-end. Its share price reflected an increase of 1.72% closing at R2.37 yesterday, its highest price since February 2020 when Covid-19 hit our shores.

News that the Mr Price Group will purchase Yuppiechef is a good sign for retail centres. The kitchenware retailer has transitioned from being an online only offering into an omnichannel business opening its first ‘brick and mortar’ store in 2017. Yuppiechef has expanded its product offering and won awards for its innovative store design making it an attractive acquisition, particularly with its focus on its in-store experiences to attract more consumers into shopping centres.

Ahead of the Monetary Committee Meeting taking place next week, 25 economists have predicted that SARB will hold the current repo rate of 3.5% steady. While a handful believe that property prices in South Africa’s ten biggest cities will increase by an average of 2.2%, a few experts at the opposite end of the table predict that property prices will remain subdued when taking inflation into consideration with Cape Town, having lagged the rest of the market in 2020, potentially experiencing the highest property price increases this year with growth of as much as 4.5%.

Afrimat’s Construction Index reports that the construction and building sector index is sitting at the same level it was at during early 2018 which highlights considerable growth compared to the third quarter. According to economist Dr Roelof Botha, the index is unlikely to pick up substantially at present, but we can expect recovery to continue throughout the course of this year. However, FNB’s latest Building Confidence Index reveals that main contractor confidence dwindled with sub-contractor confidence plummeting by 11 index points due to a deterioration in building activity growth.

Upcoming events, webinars & courses:

Thurs, 25th of March 2021:
Youth in Property Association webinar: Post-Covid-19: the infrastructure and real estate industry - where do the opportunities lie for the youth?

Thurs, 25th of March - Fri, 12th of November 2021:
SAPOA Online Education: Commercial Property Management (Wits)

Fri, 26th of March 2021:
South African Institute of Valuers (SAIV) webinar: Covid-19: what we expected, what happened, what now?

Mon, 12th of April - Fri, 7th of May 2021:
SAPOA Online Education: Real Estate Market Analysis (Wits)

Mon, 3rd of May - Fri, 7th of May 2021:
SAPOA Education: Construction Technology Programme (CEA)

Job vacancies:

Commercial Leasing Consultant (Cape Town)
Centre Manager's Assistant (South Africa)
Senior Interior Designer - Commercial (Johannesburg)
Creditors & Leasing Assistant (South Africa)
Accountant (Cape Town)
Commercial Asset Manager (Cape Town)
Leasing Agents (Johannesburg)
Regional Brokerage Manager (KZN)
Leasing Administrator (Cape Town)
Industrial Leasing Consultant (Cape Town)

In recognition of the invaluable information that property statistics and research offer, SAPOA commissioned MSCI to initiate a number of research reports that examine the office, industrial and retail property sectors with statistics that prove useful not only to their members but to government, fund managers, asset managers, universities, and academics.

(Available to SAPOA members only)

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