A holistic approach to commercial property
Nova Properties owns 24 property owning subsidiaries. One of the subsidiaries is Geo Sphere Developments Pty Ltd, which in turn owns 4 property owning subsidiaries.
In addition, Nova Properties owns Enzi Construction Pty Ltd, its own in-house construction company.
In the commercial property space, Nova Properties aims to consistently rejuvenate and maintain its portfolio of assets in order to attract a tenant mix that is both relevant for the location and long-lived, in order to create stable, yet outstanding consumer experiences for the communities that are served by them. This is enabled by its strong, experienced management team and superior in-house accounting, finance, tax and legal, stakeholder administration and communication and contracted property management and leasing resources.
These support functions stem from the company Frontier Accounting and Secretarial Services Pty Ltd (Frontier) which is 100% owned by Nova Properties, and is staffed by highly skilled and experienced professionals.
This support company works seamlessly to unpack the value inherent in the Group’s portfolio. Keeping these skills in-house enables significant cost reductions, particularly in the administration and management spaces, which sets Nova Properties apart from other players.
Frontier provides in-house accounting, finance, tax, company secretarial and stakeholder administration and communication services.
External contracted service providers in turn provide comprehensive property management services, which include, but are not limited to, the management and control of income, expenses, arrears, vacancies, facilities management, soft services, property maintenance and financial management. Supplementary services include broking (leasing and sales) and project management (new developments, redevelopments and refurbishments).
Broadly speaking, these service providers focus on reducing tenant vacancies to maximise capital growth for Nova Properties. Under-performing tenants are actively reduced, while each property’s tenant mix is analysed to optimise trading density and growth. Indicators like ‘spend-per-head’ and ‘feet through the door’ are monitored as reflections of trading density, which shows year-on-year improvement across the portfolio.
Working cohesively these in-house and external service providers resources, combined with management and industry expertise at Group level, facilitate and enable upfront planning of asset redevelopment. This long-term planning, as an enabler for reducing tenant vacancies by enhancing the value proposition and reducing the impact of redevelopment, contributes directly to the Group’s bottom-line.
Nova Properties’ focus on ongoing redevelopment and property enhancements also contribute to addressing vacancies by virtue of the process being fast-tracked from the planning stage, to bringing funding partners on board, to leveraging long-term relationships with professionals, such as architects, engineers and quantity surveyors, right through to engaging with development and construction partners.
Commitment to Broad-based Black Economic Empowerment
Nova Properties has a documented 3-year plan to attain a Level-1 BBBEE certification.
The objectives to be reached by the end of Q1 2021 are as follows:
- management – Board is 50% black;
- to train and upskill black entrepreneurs entering the property sector – Nova Properties will consider entering into an agreement with the Enterprise Development Property Fund (a Level-1, 100% black owned ESD programme), and the programme has already commenced.
Property Portfolio Overview
Retail & Commercial Asset List:
|NO||PROPERTY NAME||PROPERTY DESCRIPTION||ADDRESS||GLA||VALUE 2019|
|1||Amogela Mall (Choppies)||Community Centre||6 Mooi Str, Welkom||15 991||27 000 000|
|2||Athlone Park (Pick 'n Pay)||Neighbourhood Centre||26-30 Price Str, Athlone Park, Amanzimtoti||6 433||28 600 000|
|3||Carletonville Centre (Shoprite)||Neighbourhood Centre||Onyx Ave, Carletonville||9 961||21 600 000|
|4||Carnival Centre||Neighbourhood Centre||Erf 1294, Dalpark x 11, Brakpan||3 105||16 700 000|
|5||Cold Creek Developments||Farm Tweefontein No 915, Polokwane, Capricorn||114 634||56 109 235|
|6||Courtside Centre (Spar)||Neighbourhood Centre & Offices||Cnr Kaapschehoop & N4, West Acres, Nelspruit||6 716||77 090 000|
|7||Del Judor Mall (Checkers Hyper)||Community Centre & Offices||Cnr Watermeyer & Stevenson Rd, Witbank||21 890||182 395 744|
|8||Flora Centre (Pick 'n Pay)||Neighbourhood Centre & Offices||Cnr Conrad & Ondekkers Rd, Florida North||23 727||174 958 600|
|9||The Villa Complex||Mega Mixed-Use Complex||The Villebois Mareuil Drive, Erasmuskloof, Pretoria||88 693||848 000 000|
|10||The Village Centre (Spar)||Neighbourhood Centre & Offices||49 Ehmke Str, Nelspruit Central||5 174||45 425 000|
|11||Waterglen Centre (Pick 'n Pay)||Community Centre & Offices||Garsfontein Rd, Waterglen, Pretoria||12 451||232 464 000|
|12||Zambezi Mall||Small Regional Mall||Zambezi Rd, Derdepoort, Pretoria||31 000||480 000 000|
|339 776||2 190 342 579|
Sector square meterage and vacancy %:
|NO||PROPERTY DESCRIPTION||RETAIL GLA||OFFICE GLA||TOTAL GLA||RETAIL VACANCY||OFFICE VACANCY||RETAIL VACANCY SQM||OFFICE VACANCY SQM||NOTE|
|1||Amogela Mall (Choppies)||15991||0||15991||75%||0%||10147||0||Busy with redevelopment|
|2||Athlone Park (Pick 'n Pay)||6433||0||6433||74%||0%||4775||0||Preparing for redevelopment|
|3||Carletonville Centre (Shoprite)||9961||0||9961||28%||0%||2354||0||Preparing for redevelopment|
|4||Carnival Centre||3105||0||3105||13%||0%||555||0||Considering alternative use|
|5||Courtside Centre (Spar)||5243||1474||6717||30%||16%||996||66||Preparing for redevelopment|
|6||Del Judor Mall (Checkers Hyper)||20670||1220||21890||20%||96%||3655||1137||Preparing for redevelopment|
|7||Flora Centre (Pick 'n Pay)||20227||3500||23727||16%||20%||4836||700||Require redevelopment|
|8||The Villa Complex||88693||0||88693||0%||0%||0||0||Under development|
|9||The Village Centre (Spar)||2451||2723||5174||14%||32%||347||1829||Require redevelopment|
|10||Waterglen Centre (Pick 'n Pay)||10541||1910||12451||22%||80%||789||1424||Busy with redevelopment|
|11||Zambezi Mall||31000||0||31000||0%||0%||0||0||Require further redevelopment|
|TOTALS||214315||10827||225142||28454||5156||Vacancy percentage exclude The Villa and Zambezi|
Retail & Commercial Asset zoning:
|PROPERTY||ZONING||COUNCIL||HEIGHT ZONE||FLOOR AREA RATIO||COVERAGE|
|Amogela Mall||Business Type E||Matjhabeng||A minimum of 8.75m||0.5||100%|
|Athlone Centre||Limited Commercial||Ethekwini||4 Storeys||1||75%|
|Carletonville Centre||Business 3||Merafong City||2 Storeys||1||60%|
|Carnival Centre||Business 2||Ekurhuleni Metropolitan||8 Storeys||0||80%|
|Courtside Centre||Special||Mbombela||2 Storeys||1.2||60%|
|Del Judor Mall||Business 2||Emalahleni||6 Storeys||2||Ground-90%; Other-75%|
|Flora Centre||Business 1||Joburgh||10 Storeys||1||50%|
|The Villa Complex||Special||City of Tshwane||5 Storeys||1.5||73%|
|The Village Centre||Business 1||Mbombela||3 Storeys||0.61||50%|
|Waterglen Centre||Special||City of Tshwane||2 Storeys||0||60%|
|Zambezi Mall||Special||City of Tshwane||3 Storeys||0.4||40%|
Residential Development Asset List:
|No||DEVELOPMENT NAME||PROVINCE||HECTARES||UNITS||2019 AFS VALUE||2019 MARKET VALUE|
|1||Berg & Dal Residential Estate||Gauteng||72||777||41 215 762||155 400 000|
|2||Countryview Residential Development||Gauteng||2||190||42 870 747||38 000 000|
|3||Mont Rouge Residential Estate||North-West||9.6||198||28 064 658||39 600 000|
|4||Polokwane Mixed-Use Development||Limpopo||64||721||28 115 445||144 200 000|
|5||Steenbokpan Mixed-Use Development||Limpopo||128.2||0||2 115 000||-|
|6||Stonewood Country Estate||Mpumalanga||20.3||75||24 940 000||15 000 000|
|7||Theresapark Residential Development||Gauteng||6.9||578||41 470 000||115 600 000|
|8||Waterfall Residential Estate||North-West||38.3||2068||51 975 000||413 600 000|
|341||4 607||260 766 612||921 400 000|
The Group also actively manages running costs in a number of ways. The two biggest cost drivers associated with commercial property management are municipal rates and taxes, which are linked to a property’s municipal valuation, and electricity.
While consistently working to enhance the inherent value of its portfolio, parallel processes aim to monitor and rectify each asset’s municipal valuation, thus reducing the associated rates costs.
With regard to electricity, the period 2000 to 2019 shows an increased cost from around R5.24/m2 to R33.34/m2 – a staggering hike that could impact on tenants’ payment profiles and knock-on to the Group’s cash-flow. To mitigate, Nova’s commercial property assets have been retro-fitted with solar installations, energy-efficient lighting and pre-paid electricity meters, while generators are in place to reduce the impact on both tenants and consumers in the event of power outages; Rainwater catchers are utilised to reduce day-to-day water consumption and as a buffer against potential shortages. In this way, tenants are assured that their leases remain affordable and that consumers’ shopping experiences remain reliable, convenient and enjoyable.
A residential view
In its residential portfolio, the Group concentrates on eight geographical hubs, all selected for their development and growth potential. Within this, a focus on three models – build-to-sell, re-zoning, and rental stock – aims to unlock long-term bottom-line value from this primarily land-based asset portfolio. The planning and zoning aspects are the product of years-long in-house planning processes, while development and building are facilitated by joint venture partnerships. The Group’s residential projects are in various stages of development, and will continue, depending on market demand and the securing of appropriate funding.