SA Corporate Real Estate Limited. JSE: SAC

Background of SA Corporate
SA Corporate Real Estate is a Real Estate Investment Trust and one of the oldest established property funds still operating in South Africa today, with a history dating back to 1995.
As of 31 December 2015, the group had a diverse portfolio of 178 properties across the industrial, retail, residential and commercial sectors, primarily in major metropolitan centres in South Africa, with a secondary node in Zambia. The properties cover approximately 1.4 million square metres of lettable space and are cumulatively valued at R12.4 billion. The group also decided to buy into a major investment in the AFHCO Group, which owns 44 properties and increases SA Corporate’s exposure to the inner-city residential sector.
By market value, the group’s portfolio comprises 41% retail, 36% industrial, 14% AFCHO and 9% commercial.
SA Corporate shares are listed under the Diversified REITs sector of the Johannesburg Stock Exchange with a market cap of over R13 billion.
SA Corporate Shares Growth Driver
In 2011 and 2012, SA Corporate set about changing its strategy from putting properties up for sale to improve the quality of its portfolio, to one based around a four-pillar strategy to refine the investment strategy, externalise property management and optimise capital structure. The group broke away from Old Mututal’s institutional management in 2014, deciding to buy into an internal asset management strategy and diversifying into inner-city residential and retail property. This resulted in more profitable performance and a sustained increase in dividends and distributions.
The group’s latest financial data shows that the property portfolio increased by R1.7 billion in 2015, as a result of R640.9 million worth of inner-city residential and retail acquisitions and a R1.2 billion upward revision of the like-for-like portfolio due to retail assets under development. Overall, annual growth in distributions has risen from 1.4% in 2011 to 10.8% in 2015.
Tough market conditions have however hampered the group’s ability to decrease vacancies and improve SA Corporate share price. Although industrial vacancies have fallen to 0.3%, and retail vacancies to 4.5%, the commercial sector has suffered an 11% vacancy rate. The group is focusing on remaining underweight in the industrial sector. Meanwhile, there has been an increase in vacancies in the AFHCO portfolio, as certain portions of recently-purchased properties are being re-tenanted.
The group has decided to focus its future purchase strategy on Gauteng, supporting the higher growth that Gauteng achieves over other regions. Approximately 56% of the portfolio exposure is currently in Gauteng, with an increasing bias forecast in future.
SA Corporate Group Investor Tip
SA Corporate share price took a sharp dip on the live online stocks chart in 2015, but SA Corporate shares have rebounded strongly since then, indicating improving confidence to buy the shares. The turnaround strategy seems to have boosted investor sentiment towards the group, and more than R600 million was raised in 2016 through an oversubscribed accelerated bookbuild. The proceeds will be used to invest in the residential sector, which has strong growth potential. SA Corporate shares have changed from a luke-warm buy to a hot one.
SA Corporate Major Shareholders
Government Employees Pension Fund, Stanlib.
Sector
Financials
Industry
Real Estate
Sub industry
REIT
How to buy SA Corporate Group Shares
SA Corporate : How to buy SA Corporate Group Shares Online
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