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Steinhoff cuts estimated value of major European property portfolio

Embattled retailer Steinhoff has announced that the true value of real estate interests owned by one of its European subsidiaries may be €1.1bn (about R16bn) less than previously calculated.

The Stellenbosch-headquartered conglomerate said in a market announcement on Tuesday evening that commercial real estate advisory group CBRE had valued the real estate portfolio of its subsidiary Hemisphere International Properties at "approximately €1.1bn".

This is half the company's previous estimate of €2.2bn.

"The company will consider CBRE’s valuations in detail and will work with its auditors to determine the consolidated net book value of the Hemisphere portfolio for the purposes of publication of the company’s consolidated financial statements for 2017," it said. 

The Hemisphere portfolio comprises approximately 140 properties - including stores, warehouses, offices, production sites and vacant land - across Austria, Germany, the Netherlands, Switzerland, the UK and Eastern Europe, said Steinhoff. 

Plunge 

Steinhoff's shares closed at R3.32 on the JSE on Tuesday, up marginally on the day. Two years ago, on April 4 2016, shares in the group sometimes at the time referred to in the press as "the Ikea of Africa" were changing hands at around R94 a share. 

The group's share price plunged following an announcement in early December last year that its CEO Markus Jooste was abruptly stepping down amid an accounting scandal. 

Jooste is under investigation by priority crime investigating unit the Hawks.

joint parliamentary committee has agreed to follow a process to subpoena him to give testimony after he declined an invitation to appear before Parliament.

Steinhoff's 2017 financial results, meanwhile, have been delayed while PwC conducts a forensic audit of its books. This investigation may continue until the end of 2018.

 


 

Source

Fin24

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PSG Group invests R675m in local property business Amdec

South Africa’s PSG Group spent R675 million ($50.77 million) for a 50% stake in Evergreen Lifestyle, part of local property business Amdec, as it eyes expansion into the lucrative retirement property sector, the companies said on Tuesday.

“Our investment mandate is to invest in and work with businesses that show high growth potential,” said Nico de Waal, chief executive of PSG Alpha, a unit of PSG Group. 

De Waal said the investment was subject to regulatory approval.

The investment holding company, PSG Group, is already a majority shareholder of Curro Holdings, South Africa’s largest private education group which is expected to float its higher education business next month.

James Wilson, chief executive of Amdec Group, which includes the mixed-use Melrose Arch in Johannesburg, said there was scope to meet increased demand for retirement lifestyle villages.

The cash injection will allow for expansion to around 3 000 homes over the next three years, from the current 500 homes offered now, mainly in the Cape Town region.

Beyond five years, the companies plan to have more than 20 operating villages with 10 000 homes, growing the gross asset value to R20 billion from just under R2 billion now.

“We want to scale quickly because the numbers of middle to upper-income retirees in South Africa are growing quickly, so not only does the demand for quality accommodation exist, but it is swiftly outstripping supply,” Wilson said in a launch statement.

 


 

Source

MoneyWeb 

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New property fund provides solutions to cash strapped businesses

Old industrial buildings on city fringes are getting a new lease on life. Situated on major transportation routes for people and goods, they are being remodeled into modern mixed- use business centres in which clients share a range of free facilities to reduce the amount of space they require. Rentals are between 30% and 40% lower than in traditional retail and business nodes. 

Established in March this year and already with R550 million of assets under management, Inospace Property Fund has already acquired 70 000 sq metres of large mixed-use commercial real estate assets which offer flexible workspaces, light industrial, offices and storage spaces in Johannesburg and Cape Town, with another 35 000 sq metres scheduled for completion before the end of the year. .

With six branded business centres - one in Sandton, Johannesburg, and five in Cape Town -- Inospace recently completed the acquisition of three industrial buildings in Cape Town: the Island Centre in Paarden Eiland from Ascension Properties for R115m; the 12 500 sq metre Moirs baking powder site acquired from Pioneer Foods and the 20,000 sq. metre renamed Maitland Business Exchange from Investec Property.

“We’re moving into a shared economy,” says Inospace CEO Nicholas van Eeden.

“Operating a business is becoming extremely challenging. Economic conditions are tough and businesses have to keep a tight rein on costs but traditional commercial property nodes are becoming congested, expensive and under pressure due to residential conversions. Working from affordable modern work spaces with free shared facilities on the urban edge just makes good business sense for our clients.”

The aim, explain van Eeden, is to develop a commercial community among tenants, whom Inospace stringently refer to as clients, within each business centre. The group’s fast growing network is being promoted as a means to foster collaboration and trade. Inospace facilitates regular networking opportunities and communication channels in each centre, including a soon-to-be-launched app, that provides information on businesses operating in them.

“This is a major departure from the traditional landlord-client relationship,” says  van Eeden.

“We see Inospace not as a landlord or lessor but rather as a business enabler to our clients Each property has a full time on-site Centre Manager whose job it is to create and sustain an environment designed for growth.”

With prices of old industrial buildings relatively low, Inospace can afford to make substantial investment in remodeling its acquisitions and still be able to offer space at significantly lower rentals than in traditional business nodes.

“We have been attracting a lot of retail and office companies who are seeing the value of cheaper space in our mixed-use business centres. As the economy tightens users of industrial units are taking smaller spaces and rather using free-shared services that are built into fixed one-price rentals. This passes substantial savings to our clients” says Van Eeden.

Fibre and WiFi are embedded in all Inospace business centres. Shared facilities include a modern business hub with meeting rooms, fully equipped boardrooms, cafés, restaurants and pause areas. Each rented unit has its own electricity meter, enabling tenants to control their energy usage.

“Our business centres’ proximity to major roads and transportation networks is another key advantage,” says Van Eeden. “With retail coming under pressure, on-line shopping increasing and urbanisation pushing city limits, many companies need affordable centrally located space from which to combine their distribution, administrative, retail and office requirements”

With a growing list of businesses wanting to move into their newly refurbished centres Inospace seems to be capitalising on a growing international trend that has been identified by companies such as JSE listed Sirius Real Estate that owns 46 business centres in Germany.

The company’s latest Powder Mill offering on Sunset Circle, Ndabeni is currently undergoing extensive remodelling and is scheduled for occupancy in January 2018. According to Inospace the Powder Mill is filling up fast and they have already secured anchor tenants. Events and staging company Ampere Technology is relocating its head office to The Powder Mill where it will occupy 3 500 sq metres. The centre offers a combination of studios, offices, light production units and warehousing. 

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