Safari Investments portfolio to exceed R2bn – 6 months ahead of target

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Francois Marais, Safari Investments CEO

Safari Investments RSA Ltd’s growth has seen strong and steady over the financial year, as evident in the following highlights:

  • The portfolio increased in value from R1.37 billion in 2014, prior to listing, to R1.75 billion. This resulted in portfolio growth of 20% for the financial year, which will allow Safari Investments to exceed the R2 billion target for the current financial year six months ahead of prediction. This growth was due to the acquisition of new properties and expanding of existing premises. The company anticipates an additional 20% growth for the 2016 financial year.
  • Across the portfolio, 90% national tenancy was maintained with less than a 1% vacancy factor, and the rental 4% of tenant turnover.
  • The group successfully implemented the option of shares for reinvestment of distributions, with positive results, as it stimulated share price and value; and want to continue this trend in future.
  • Cost of debt improved from prime less 1% to prime less 1.5%, and the company does not foresee exceeding a gearing level of 30% other than over the short term.

The company pays close attention to GREEN BUILDING principles by using innovative architectural design and insulation to minimise energy consumption; the public spaces have natural light and ventilation.

Secondly, air-conditioning and lighting systems are selected on the basis of low energy consumption. The overall electrical demand (of below 70va/m² market average 110va/m²) and yearly energy consumption of below 240 kWh/m²/year for the complete centre and below 190kWh/m²/year (excluding the anchor tenant) are well within the SANS Energy Efficiency standards.

Safari assists their tenants to keep their operating costs well within market standards and easy to manage, reflected in the rental 4% of trading density; which was 32 900/m² for the portfolio average.

The investment group has had the foresight to ensure over the past five years that all its premises (shopping centres) have standby generators, to ensure the availability of full emergency power. The 10.5MVA currently available will be extended to 11MVA in the immediate future and to a further 13MVA. Solar power will be implemented at all three centres for local consumption, with an 18-20% return on investment.

Entering the next phase on this sound foundation, Safari believes the company is well positioned to cover the anticipated pipeline projects by growing by a further 100,000m² and reaching a portfolio level of R4 billion within the next three to four years.

The Platz am Meer Waterfront in Swakopmund, Namibia, is the first retail investment outside the country.

Safari Investments has decided to also explore investment opportunities in Europe. The company has also recently taken a decision to invest in day-hospitals and major filling stations. These sectors have strong national tenants with a low maintenance cost due to a triple net lease.