South African corporate giant SA Corporate faces headwinds as it navigates the year’s first half. Despite grappling with rising interest rates and the challenges of load shedding, the company has reported a 14% increase in group revenue, totalling R1.11 billion by the end of June, as per news24. However, distributable income fell over 12% to R318 million. The group, valued at approximately R4.6 billion on the JSE, focuses on properties in major South African metropolitan areas. It holds a diverse portfolio of 151 properties worth R14.9 billion. Retail accounted for 44% of its revenue, followed by its subsidiary, the Africa Housing Company (Afhco), contributing 31%. Industrial and commercial properties made up 23% and 1%, respectively.
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Traditionally, lettable area vacancies in the portfolio, excluding Afcho, decreased from 2.7% to 2.1%. Afcho’s retail vacancies fell from 4% to 3.1%. The Afhco portfolio performed exceptionally well, attributed to its provision of quality, affordable apartments and services. However, municipal infrastructure and service delivery failures impacted the South Hills and The Falls lifestyle estates.
Despite these challenges, SA Corporate remains focused on bolstering its presence in Gauteng, considering it a defensive move. The company plans to deploy capital from its R1.1 billion disposal pipeline to enhance its retail portfolio’s quality and expand its residential rental sector’s footprint. While its shares have risen slightly in recent trading, they are down 14% over the past year.
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Picture: Instagram / francis_baloyi
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