SA Corporate to sell down office portfolio
Diversified property fund will instead focus on buying new residential and industrial properties
Stubborn vacancies in the office market have prompted another property group, SA Corporate Real Estate, to decide to sell most of its commercial buildings, worth R1bn, over the next two years. The national office vacancy rate was 11.1% at the end of December, according to the SA Property Owners’ Association (Sapoa) and numerous listed property funds have looked to sell down or convert their office portfolios to other uses, including Fortress and Emira. CEO Rory Mackey said SA Corporate’s office assets had overall underperformed in recent years, placing pressure on the group’s financial results. “It is our intention to reduce our small exposure to offices even further due to the poor prospects for this sector. We are targeting to reduce our office portfolio to be circa 2.5% of assets by value by the end of 2019,” he said. They could then be sold down further in 2020 if other asset types continue to offer better returns. Offices account for 5% of the company’s assets. SA Corporate own...
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