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IOL News
2 days ago
- Business
- IOL News
Fairvest reports robust interim distributable income growth and acquires five properties
Fairvest's Southview Centre in Soshanguwe. The group is steadily transforming its diversified commercial property portfolio to one that focuses on retail centres for lower income communities. Image: Supplied Fairvest, which Friday announced the acquisition of five properties for R477.7 million, increased its interim distribution for its B share by 8.8%, a performance well above inflation and which ranks it among the leaders in South Africa's REIT sector at present. Fairvest owns and manages a portfolio of 127 retail, office, and industrial properties, valued at R12.5 billion. During the six months to March 31, the group increased its stake in Dipula Properties to 26.3% from 5%, which was accretive to earnings and loan-to-value. 'Fairvest is making progress in transforming its diverse portfolio by improving the quality, while pursuing its aim of becoming a retail-only REIT servicing low-income communities in South Africa. The portfolio transformation is taking place at a slow and measured pace,' CEO Darren Wilder said in an interview. The strategy involves disposing of non-core assets and reinvesting in retail-focused properties - about 70% of revenue is currently generated from retail properties, he said. Consistent with this plan, Fairvest acquired five retail properties in KwaZulu-Natal and the Western Cape: Nquthu Shopping Centre, Ulundi Shopping Centre, Eyethu Junction, and Shoprite Manguzi in KwaZulu-Natal. These shopping centres have key food retailers, including Shoprite, Boxer, and SuperSpar, as anchor tenants. Also, an agreement was reached to acquire Thembalethu Square, outside George in the Western Cape, which is anchored by Shoprite and Boxer. Fairvest owns 51% of the issued shares in the new acquiring company. Wilder said they were 'always on the lookout' for assets that fitted their strategic focus. Fairvest disposed of one industrial property valued at R24m during the period and at a 14.3% premium to book value. Capital expenditure of R139m included R19.8m for further investments in solar initiatives. The group also invested R76.6m in fibre network infrastructure, which earns rental income. 'The portfolio continues to benefit from the disciplined execution of our strategy - vacancies remain consistently low, tenant quality has improved and the portfolio remains operationally robust. These solid fundamentals, combined with conservative balance sheet management, position the group for sustained growth,' said Wilder. There was positive letting activity in the six months, with 236 new deals and 216 renewals. Vacancies edged up to 5.5% from 4.3%. The entire 8% increase in property expenses was linked to higher municipal costs. Excluding this, operating expenses decreased by 1.9%. Property expenses were expected to increase around 7% for the year, said Wilder. Net loans of R4.4bn represented a loan-to-value of 31.8%, a reduction from 33.3% at the September 2023 year end. Cash on hand and undrawn debt facilities stood at R547.4m by the end of the interim period. Progress was made on the business continuity strategy - around 48.3% of the portfolio's gross lettable area has access to either partial or complete backup power. The number of solar plants stood at 46, with total installed capacity of 21.9 MWp. These plants provided 16.7% of the combined portfolio's electricity needs in the six months. Clean, renewable energy generated during this time amounted to R33.1m. A further eight plants were expected to add some 2.1 MWp of capacity.
The Citizen
26-05-2025
- Business
- The Citizen
Pick n Pay turnaround taking shape as it delivers on first year of recovery plan
Pick n Pay cut its trading loss by R1 billion, but the recovery plan is only in its first year and will take another two years to bear fruit. Pick n Pay has delivered on the first year of its multi-year recovery plan as the retailer's turnaround is taking shape. The group's results for the 53 weeks to 2 March 2025 were announced this morning. They show that Pick n Pay reduced its trading loss by R1 billion, well ahead of forecast, while its like-for-like turnover and customer growth see momentum rebuilding. Announcing the results, CEO Sean Summers said there are no surprises. 'We are meeting the guidance that we have given every six months, making calm and steady progress. You cannot rely on quick wins in our situation, and it will continue to be a journey as we rebuild our Institutional Memory. 'This was an important year for Pick n Pay as we executed the first leg of our operational and financial recovery. We are exactly where we said we would be when presenting the strategy last May, and in some aspects, we are tracking slightly ahead. 'Particularly pleasing is the reduction in our Pick n Pay trading loss by 64% after predicting a 50% reduction.' ALSO READ: How did Pick n Pay do it? From technically insolvent to growing sales in months Recapitalising Pick n Pay The first of its six strategic priorities announced in May last year was to recapitalise the Pick n Pay Group. In this financial year, the group completed its two-step Recapitalisation Plan, raising R12.5 billion through the Pick n Pay Rights Offer (R4.0 billion) and the Boxer JSE listing (R8.5 billion) and restoring the group to a net cash position of R4.2 billion. 'We started to give much-needed attention to our core Pick n Pay supermarkets, and we are pleased to see the early results in reporting positive like-for-like sales growth, notwithstanding the sustained pace of new store openings by our competitors in a restrained and competitive market,' Summers said. Accelerating like-for-like sales The second of its priorities was to accelerate like-for-like sales growth, and the group's turnover for the 53-week period increased by 5.6%. Over the past 18 months, Pick n Pay company-owned supermarkets delivered consistent gains in like-for-like sales growth, improving from -0.5% in the second half of the previous financial year to +3.6% in the second half of the current financial year. 'Our franchisees also showed steady positive recovery, and this positive like-for-like momentum continued in the first eight weeks of the financial year.' Summers also pointed out that the group maintained its focus on keeping selling prices down, recording inflation in Pick n Pay of just 2.1% for the current financial year, sharply down on the previous financial year's 8.2% and well below Statistics SA's food price inflation of 3.9%. ALSO READ: Can Pick n Pay's new look fix their troubles? New store design revealed Resetting Pick n Pay's store estate The third priority was to reset Pick n Pay's store estate and the group made considerable progress either converting to Boxer, franchising or closing those stores where there was no prospect of their returning to profitability, Summers said. 'Importantly, a great deal of focus was put into certain loss-making stores, with some now returning to profitability. We also started opening and committing to new stores and will increasingly refurbish our supermarkets to meet and exceed customer expectations.' Pick n Pay's leadership and people The fourth pillar of the strategy was leadership and people. The ongoing focus on driving operational execution and restoring its Institutional Memory required strong leadership and engaged employees. Summers said key steps have already been taken, including staff training to improve the customer experience, reinstating regional leadership structures and launching a campaign to reignite employee pride and purpose. ALSO READ: Will Boxer listing on the JSE save Pick n Pay? Strengthening partnerships The fifth pillar, strengthening partnerships, was clearly demonstrated in the tie-up with FNB e-Bucks, which already helped to attract customers across all segments. eBucks recently won three major awards, including best financial services loyalty programme in the world. Summer pointed out that the new four-year Tier 1 Springbok rugby sponsorship further amplified brand visibility and national pride. 'We celebrate the extraordinary role that our Springboks and sport play in unifying our country.' He said the retailer remains focused on innovation, adaptability and income diversification through its popular Smart Shopper programme, growing retail media capability and omnichannel platforms, while expanding value-added services revenue. 'More good news was growth of 48.7% in online sales for the 53 weeks, led by asap! and PnP groceries on Mr D. Pick n Pay asap! has grown to 600 locations and franchisee adoption of asap! doubled in two years, with new growth potential unlocked with the launch of the new asap! App. 'The growth in scale now resulted in achieving profitability on a fully costed basis. 'We are very happy with our balance between clicks and bricks,' Summers said. ALSO READ: Boxer shares worth R53 million traded since listing Good news from Pick n Pay Clothing with 11.6% growth Pick n Pay Clothing delivered 11.6% growth from standalone stores in the new financial year and reported market share gains. It opened net 30 company-owned stores during the financial year to bring the total estate to 415 stores. 'When I returned in October 2023 I stated that the recovery of Pick n Pay would be a multi-year process and that things would get worse before they got better. 'It is our sense that we see this unfortunate chapter now bottoming out and we have recalibrated our recovery programme to break even in financial year 2028. 'The journey of restoring Institutional Memory for long-term sustainability and success continues, and we are investing ahead of the recovery, ensuring a strong future-fit business with energy and conviction. Importantly, our customer base is steadily growing as one by one they experience the change. 'It is with a passionate sense of pride and honour that I have confirmed an extension to my contract until May 2028, thereby ensuring leadership continuity in the short term, followed by an orderly succession process,' Summers said.
The Citizen
05-05-2025
- Business
- The Citizen
AA warms of ‘significant implications' of underfunding Rea Vaya bus service
The Johannesburg municipality says minibus taxis still account for 91% of monthly trips, leaving Rea Vaya and Metrobus lagging behind. The Automobile Association of South Africa (AA) is lamenting a potential public transport crisis brewing in Johannesburg. The entity accused Rea Vaya of mismanagement, which has dented public confidence and impeded low-income commuters. Despite having millions earmarked for bus services in the coming financial year, the AA believes more needs to be done to provide customers with an attractive public alternative. 'Not just a financial loss' The AA stated that the Johannesburg municipality had lost more than R300 million from a public transport grant due to operational failures. 'Originally earmarked to support and expand the Rea Vaya network, the lost funding carries significant implications, not only for the city's mobility agenda but for road users, particularly for low-income commuters who rely on affordable and reliable transport options,' stated the AA on Monday. 'This is not just a financial loss, it's a missed opportunity to improve the lives of thousands of Johannesburg residents who depend on public transport to access work, education, and essential services,' stated AA CEO Bobby Ramagwede. The AA added that the cost of private vehicle ownership was prohibitive and that public transport was a vital avenue for the personal movement of the poor. 'The implications of this funding go beyond mismanagement: they highlight a chronic inability to plan, execute, and maintain public transport systems with integrity, transparency, and accountability,' the AA added. Budget for Rea Vaya and Metrobus In the Johannesburg municipality's 2025/26 Integrated Development Plan (IDP), the city states that 10.2 million trips are made monthly via minibus or taxi. The city states that this accounts for 91% of all public transport trips in Johannesburg, leaving Rea Vaya and Metrobus trailing. The IDP states that Metrobus serviced 3.3 million passengers via 229 routes in the last financial year, while the Department of Transport aims to have Rea Vaya facilitating 13 million passenger trips annually by the end of the year. Rea Vaya's proposed budget for the coming year includes R12.5 million for land acquisition, R25 million for station rehabilitation and R150 million for an automated fare collection system. For Metrobus, at least R90 million has been proposed for the entity for the next financial year, including R32 million for new Metrobuses. New route to success The AA's sentiments suggest that the funding would be in vain if Rea Vaya did not develop a clear vision of its future. 'Without decisive action and a turnaround strategy, Johannesburg risks further isolating low-income communities and increasing reliance on private vehicles, which could worsen traffic congestion, road safety risks, and environmental strain,' the AA stated. The entity called for engagement with civil society and collaboration with national stakeholders to help realise Rea Vaya's potential. 'We cannot afford to waste time or resources. Johannesburg residents need a transport system that works — and leadership that makes it happen,' NOW READ: R140m Rea Vaya depot stalls as informal settlement blocks progress
IOL News
24-04-2025
- Business
- IOL News
R312.5 billion investment boom for Gauteng as provincial conference surpasses goals
Gauteng's MEC for Finance and Economic Development, Lebogang Maile, announced that the province secured over R312 billion Image: Itumeleng English / Independent Newspapers Gauteng's MEC for Finance and Economic Development, Lebogang Maile, announced that the province has secured over R312 billion in investment pledges at the inaugural Gauteng Investment Conference. The provincial government initially set a target of attracting at least R300 billion in new investment pledges as part of its broader goal to secure R800 billion in investments over the next three to five years. Speaking at the conference, Maile said the aim of the conference was "to catalyse the province's economic momentum and align with its broader integration goals". TARGET EXCEEDED | INAUGURAL GAUTENG INVESTMENT CONFERENCE, 2025 🇿🇦 We have managed secure pledges with an investment value of R312.5 billion. This is R12.5 billion more than our initial target. 1/5 — Lebogang Maile (@LebogangMaile1) April 3, 2025 He also highlighted that Gauteng contributes 33.2% to the country's Gross Domestic Product (GDP), adding that it is the largest provincial economy within the Southern African Development Community (SADC). Maile confirmed that the provincial government had exceeded its initial target, securing R312.5 billion in investment pledges, R12.5 billion more than the original goal. Get your news on the go, click here to join the IOL News WhatsApp channel. "We have managed to secure pledges with an investment value of R312.5 billion. This is R12.5 billion more than our initial target," Maile said. He further added that the pledges will be directed toward specific projects across all five development corridors of Gauteng, with the Central Corridor receiving R174.9 billion of the share. "These pledges have been directed towards specific projects across all 5 development corridors of Gauteng, with the Central Corridor receiving R174.9 billion of the share, the Eastern Corridor receiving R36 billion, the Northern Corridor receiving R13 billion, the Southern Corridor receiving R42 billion, and the Western Corridor receiving R23.7 billion," he said." "The broader Gauteng City Region has received pledges of R312 billion," he added. IOL Business
