The JSE head office in Sandton. Picture: SUNDAY TIMES
The JSE head office in Sandton. Picture: SUNDAY TIMES

Property group Newpark, whose portfolio includes the JSE’s head office, said on Wednesday that its focus on finding tenants for its mixed-used property 24 Central in Sandton is likely to pay off in its second-half.

The company cited economic pressures on tenants as its interim distributable earnings fell 2.5% to 24.32c to end-August, but it has maintained its growth target of 6% to 8% for its year to end-February 2020.

SA’s weak economy has prompted a number of JSE-listed property companies to revise their distribution targets, amid rental reversions and rising vacancy rates.

The SA Property Owners Association (Sapoa) has expressed concern over rising vacancies in Sandton, in particular, reporting in September that the suburb’s vacancies stood at 17.1% in the third quarter of 2019. This compared to a vacancy rate of 7.6% in Rosebank, and 11% nationally.

Newpark said revenue fell 9% to R61m to end-August, largely due to vacancies at its mixed-use property in Sandton, which is next to the JSE’s office. Vacancies had, however, reduced towards the end of its period under revenue, falling to 11.9% from 17.4% in the prior comparative period.

“The board remains mindful of the current pressures experienced by tenants in the mixed-use building [24 Central], manifesting in higher than desired vacancies in the short term,” it said.

Besides the vacancies at 24 Central, the tenant profile remains largely the same and no acquisitions or disposals were made during this period, Newpark said.

The company also owns a property in Linbro Business Park and another in Crown Mines, with a total portfolio of R1.4bn.

Newpark’s little-traded share was unchanged at R5 on Wednesday afternoon, having fallen 16.67% so far in 2019. In the year to date, the JSE’s property index has fallen 4.72%.

gernetzkyk@businesslive.co.za