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 property management and leasing resources.
These support functions stem from two companies; Frontier Accounting and Secretarial Services Pty Ltd (Frontier) and Centro Property Group Pty Ltd (Centro), which are 100% owned by Nova Properties, and are staffed by highly skilled and experienced professionals.
These support companies work 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.
Centro provides 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, Centro focuses 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 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.
By the end of Q1 2021 the objectives are as follows;
- ownership – 33% black owned;
- management – Board is 50% black;
- to train and upskill black entrepreneurs entering the property sector – Nova Properties has entered 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 DESCRIOPTION||ADDRESS||GLA||VALUE 2018|
|1||Amogela Mall (Choppies)||Community Centre||6 Mooi Str, Welkom||15 991||125 250 000.00|
|2||Athlone Park (Pick 'n Pay)||Neighbourhood Centre||26-30 Price Str, Athlone Park, Amanzimtoti||6 433||32 430 000.00|
|3||Benoni Hyper||Community Centre||Cnr Princess Avenue and East Street, Benoni||17 093||39 770 000|
|4||Carletonville Centre (Shoprite)||Neighbourhood Centre||Onyx Ave, Carletonville||9 961||51 895 000.00|
|5||Carnival Centre||Neighbourhood Centre||Cnr Rangeview & Airport Rd, Dalpark X11, Brakpan||3 105||21 360 000.00|
|6||Cold Creek Developments||Residential Development||Farm Tweefontein No 915, Polokwane, Capricorn||114 634||91 475 000|
|7||Courtside Centre (Spar)||Neighbourhood Centre & Offices||Cnr Kaapschehoop & Samora Machel Dr, West Acres, Nelspruit||6 716||76 310 000.00|
|8||De Marionette Centre (Pick 'n Pay)||Neighbourhood Centre & Offices||Cnr Michelle & Blue Crane Ave, Meyersdal, Alberton||5 068||58 240 000.00|
|9||Del Judor Mall (Checkers Hyper)||Community Centre & Offices||Cnr Watermeyer & O.R. Tambo Rd, Witbank||21 890||218 700 000.00|
|10||Flora Centre (Pick 'n Pay)||Neighbourhood Centre & Offices||Cnr Conrad & Ondekkers Rd, Florida North||23 727||238 720 000.00|
|11||Leeuwpoort Street||Offices||Cnr Leeuwpoort Street & Short Street, Boksburg||3 020||7 000 000|
|12||Magalieskruin Centre (Pick 'n Pay)||Neighbourhood Centre||390 Braam Pretorius Rd, Magalieskruin, Pretoria||3 381||28 500 000|
|13||Secunda Plaza (Choppies)||Neighbourhood Centre||Harwood Rd, Secunda CBD||6 380||17 100 000|
|14||Secunda Centre (Shoprite)||Neighbourhood Centre & Offices||Cnr Lourens Muller & Diedericks Street||8 768||24 700 000.00|
|15||The Villa Complex||Mega Mixed-Use Complex||The Villebois Mareuil Drive, Erasmuskloof, Pretoria||88 693||616 000 000|
|16||The Village Centre (Spar)||Neighbourhood Centre & Offices||49 Ehmke Str, Nelspruit Central||5 174||49 450 000.00|
|17||Town Square (Pick 'n Pay)||Neighbourhood Centre||53 Kantoor Street, Lydenburg CBD||5 505||46 500 000|
|18||Waterglen Centre (Pick 'n Pay)||Community Centre & Offices||Cnr January Masilela Dr, Garsfontein Rd, Waterglen, Pretoria||12 451||114 130 000.00|
|19||Zambezi Mall||Small Regional Mall||Cnr Sefako Makgato Dr & Moloto Rd, Derdepoort, Pretoria||31 000||332 500 000.00|
|388 990||2 190 030 000|
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||De Marionette Centre (Pick 'n Pay)||4331||737||5068||15%||0%||600||0||Preparing for redevelopment|
|7||Del Judor Mall (Checkers Hyper)||20670||1220||21890||20%||96%||3655||1137||Preparing for redevelopment|
|8||Flora Centre (Pick 'n Pay)||20227||3500||23727||16%||20%||4836||700||Require redevelopment|
|9||Magalieskruin Centre (Pick 'n Pay)||3381||0||3381||9%||0%||366||0||None|
|10||Secunda Centre (Shoprite)||8174||594||8768||15%||85%||1181||505||None|
|11||Secunda Plaza Centre (Choppies)||6380||0||6380||27%||0%||1840||0||None|
|12||The Villa Complex||88693||0||88693||0%||0%||0||0||Under development|
|13||The Village Centre (Spar)||2451||2723||5174||14%||32%||347||1829||Require redevelopment|
|14||Town Square (Pick 'n Pay)||5505||0||5505||0%||0%||0||0||None|
|15||Waterglen Centre (Pick 'n Pay)||10541||1910||12451||22%||80%||789||1424||Busy with redevelopment|
|16||Zambezi Mall||31000||0||31000||0%||0%||0||0||Require further redevelopment|
|TOTALS||242086||12158||254244||32441||5661||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%|
|De Marionette Centre||Business 3||Ekurhuleni Metropolitan||2 Storeys||0.4||30%|
|Del Judor Mall||Business 2||Emalahleni||6 Storeys||2||Ground-90%; Other-75%|
|Flora Centre||Business 1||Joburgh||10 Storeys||1||50%|
|Magalieskruin Centre||Business 2||City of Tshwane||2 Storeys||1||50%|
|Secunda Centre||Business 1||Govan Mbeki||4 Storeys||3||100%|
|Secunda Plaza Centre||Business 1||Govan Mbeki||4 Storeys||3||100%|
|The Villa Complex||Special||City of Tshwane||5 Storeys||1.5||73%|
|The Village Centre||Business 1||Mbombela||3 Storeys||0.61||50%|
|Town Square||Business 1||Thaba Chweu||6 Storeys||3||90%|
|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||ZONED UNITS||2018 AFS VALUE||2018 MARKET VALUE|
|1||Berg & Dal Residential Estate||Gauteng||72||777||40 789 182.00||155 400 000.00|
|2||Countryview Residential Development||Gauteng||2||190||43 167 261.00||38 000 000.00|
|3||Mont Rouge Residential Estate||North-West||9.6||198||25 000 000||39 600 000.00|
|4||Polokwane Mixed-Use Development||Limpopo||64||721||28 115 445.00||144 200 000.00|
|5||Steenbokpan Mixed-Use Development||Limpopo||128.2||0||2 050 000.00||-|
|6||Stonewood Country Estate||Mpumalanga||20.3||75||25 000 000.00||15 000 000.00|
|7||Theresapark Residential Development||Gauteng||6.9||578||40 710 000.00||115 600 000.00|
|8||Waterfall Residential Estate||North-West||38.3||2068||56 760 000.00||413 600 000.00|
|341.3||4 607||261 591 888.00||921 400 000.00|
The Group also actively manages running costs in a number of ways. The two highest external costs 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 2016 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.