South Africa’s listed property sector is said to be showing signs of recovery. Despite having faced major challenges during 2020, 4AX (4 Africa Exchange) listed Heartwood Properties Limited has recorded a net asset growth per share of 25% for the year ended February 2021. Since first listing on the stock exchange in March 2018, the company has grown its net assets by a total of 93%.
“We have had to endure a lot this past year. We offered rental relief of R2.5 million in the form of rental reductions but we are now back on track with tenants all paying rent as per their lease agreements” comments John Whall, CEO of Heartwood Properties Limited.
“Vacancies are at 3% of our lettable area. The fact that we know all our tenants well and have a hands-on approach to the management of our portfolio has assisted us immensely in navigating the past year.”
With vacancies of B and C grade offices at an all-time high in Cape Town’s CBD and in Sandton, Heartwood Properties’ A-grade offices, which makes up most of their office portfolio, have managed to hold value during the pandemic. These offices are decentralised, small sectional title offices and by having the flexibility to sell them on to end users, makes these assets attractive to buyers in this market.
The key to getting ahead in this space is going to be innovation. As businesses become more accustomed to hybrid working models the idea of returning to a traditional office space will become less appealing. There is going to be room to grow if developers rethink how buildings are designed. As was the trend pre-Covid-19, Cape Town remains the tech hub of South Africa, attracting global companies specialising in data, IT, and computer programming. These companies employ hundreds of young employees, who Whall says, were some of the first to get back to working from the office, albeit flexi hours.
“Our new development office model, starting with the Sunlvei office development in Somerset West near Cape Town, is set for completion at the end of 2022 and it will be designed to accommodate smaller companies. It will have a business lounge with meeting rooms, zoom pods, a coffee station and hot desk areas for the exclusive use of tenants and owners in the building, making their office space much more efficient as they will not need their own board rooms, and their roving staff who work mostly from home will have a space when they come in” comments Whall.
“We are excited about this new concept, and we will be rolling these out on the appropriate sites. With more people wanting to decentralise their offices, moving them closer to where they live, property innovation will become the new normal” he concludes.
Heartwood Properties Limited successfully completed the Soleil office development in Bryanston during the last year, and construction of Buildit’s flagship plus development in the Western Cape is on track for completion on 30 June 2021.