Octodec HY23 HEPS drop 29.1%
Property Group Octodec reported a 10.7 per cent jump in half-year distributions to 88.1 cents a share. But total vacancies across the group also rose, driven by an increase in unlet spaces in its office and retail portfolio. Jeffrey Wapnick, MD, Octodec joins CNBC Africa for more.
Tue, 16 May 2023 12:21:31 GMT
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AI Generated Summary
- OctaRick experiences a boost in half-year distributions, pleasing shareholders with a 10.7% increase to 88.1 cents per share.
- The company identifies challenges with rising vacancies in its office and retail spaces, prompting discussions on converting offices to residential units.
- Efforts to address power supply issues, explore alternative solutions like generators and solar panels to mitigate the impact of load shedding on tenant demand and safety.
Property Group OctaRick has released its latest financial results, showcasing a 10.7% increase in half-year distributions to 88.1 cents per share. Despite this positive news for shareholders, the company is also experiencing a rise in total vacancies across its group, particularly in its office and retail portfolio. Jeffrey Rapnick, the Managing Director of OctaRick, sat down with CNBC Africa to discuss the numbers in more detail. Rapnick highlighted the unique nature of their office spaces, located in both Johannesburg and Pretoria CBDs. Approximately 50% of their office spaces are occupied by government tenants, which has remained stable. The remaining 50% are commercial tenants, with plans to convert some of these vacant office spaces into residential accommodation in the future. As Rapnick delved into the discussion on low-shedding and its impact on safety and tenant demand, he noted that while nighttime activity in the CBD may feel unsafe due to power outages, residential units are still in high demand with a low vacancy rate of 5%. To address the power supply challenges, OctaRick is exploring alternative solutions such as generators and solar panels, although installation costs remain a concern given the tight margins on developments. When it comes to rental renewals and recouping costs for generated power, Rapnick mentioned that the process is not straightforward and can pose challenges with tenants. In the past six months, the company has managed to recover a portion of the costs but still faces ongoing issues. Looking ahead, OctaRick is focusing on investing in its existing properties rather than pursuing new acquisitions. While they have divested some properties and have more in the pipeline for disposal, the company believes that enhancing and repurposing their current stock is a more prudent strategy in the current market conditions. By prioritizing maintenance and conversion projects, OctaRick aims to maximize the potential of its existing portfolio without taking on additional risks in a challenging environment.
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