Real Estate Investor Magazine South Africa June/ July 2019 | Page 49

TRADEHOLD LIMITED INDLUPLACE PROPERTIES LIMITED
TRADEHOLD JOINT CEO, FRIEDRICH ESTERHUYSE CAREL DE WIT, CEO
Tradehold is a listed property company on the JSE and
is not a REIT yet although they aim to be in 2022. Their
core focus is in South Africa (SA), Namibia and the United
Kingdom (UK). The company is split into four businesses
Moorgarth and The Boutique Workplace Company in the UK
with serviced office accommodation similar to the WeWork
model at nearly 30 sites in central London. Moogarth
owns mainly retail malls (50%), offices (35%), Leisure (8%),
Residential (6%). Tradehold’s other two businesses Collins
Group in SA owns 78 industrial properties, 21 offices, and 36
reatil properties with six properties under development. Nguni
Property Fund in Namibia owns mainly retail properties and
one office and leisure property. Indluplace Properties Limited is the largest, residential
focused JSE-listed REIT with a portfolio that provides
affordable rental housing. Indluplace reported a dividend of
37.49 per share for the period of six months ended 31 March
2019.
Tradehold joint CEO Friedrich Esterhuyse said business
conditions for Tradehold’s operations in South Africa and the
UK during the second half of the year did not differ materially
from those of the first half. “If anything, pressure mounted all
round, given the rising pre-election political tensions in South
Africa and the protracted Brexit negotiations that have further
undermined UK business confidence.” The company’s revenue, excluding straight line rental
income declined to R318.3 million compared to R334.7
million at 31 March 2018, with the non-renewal of the
Highveld View bulk leases accounting for a substantial
portion of the decline.
Esterhuyse said 2019 is expected to be another tough year
for consumers both in the UK and South Africa. “Although
the macro-economic outlook is improving for the UK, we
believe the local economy will continue to struggle for as long
as Eskom is an albatross around its neck.  To counter these
conditions, we are following a defensive strategy – reducing
debt, divesting ourselves of non-core assets and protecting
value – while readying ourselves for when there is an upturn in
market conditions,” he said.
He says the strategy is to strengthen the balance sheet
by reducing debt levels by selling non-core assets, raising
capital post year, net asset restructuring of Collins Group will
immediately reduce gearing from 69% to 63%. The plan is to
restructure remaining debt more efficiently to reduce average
debt cost.
Providing affordable rental accommodation that caters
to the housing needs of individuals with single-headed and
mid-sized households, the portfolio is made up of 2803 units.
The portfolio now comprises of a significant share (47%) of
two bedroom units and bachelor one bed units (41%). These
properties are located in both the inner city and suburban areas,
where affordability for low income families are paramount.
CEO De Wit concluded: “The current environment has
encouraged us to crystallise our strategy and to deliberately
shift from student accommodation and head leases to
concentrate on our core business which is to provide value
for money options to individuals choosing to rent in well-
managed, well-maintained buildings. We will be increasing
our operational team to position our portfolio optimally as
we believe that demand and affordability will improve once
the macroeconomic environment stabilises. We anticipate that
the performance of the portfolio will improve in the second
half of this financial year and look forward to less political
and economic uncertainty, which should result in improved
investment returns”.
SA Real Estate Investor Magazine JUNE/JULY 2019
47