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The abridged consolidated financial statements for the year ended 31 March 2017 and notice of annual general meeting
Safari Investments RSA Limited
Registration number: 2000/015002/06
Approved as a REIT by the JSE Limited
JSE share code: SAR
ISIN: ZAE000188280
Republic of South Africa
("Safari" or the "company" or the "group")
The abridged consolidated financial statements for the year
ended 31 March 2017 and notice of annual general meeting
The preparation of the abridged consolidated financial results
for the year ended 31 March 2017 was prepared under the
supervision of the financial director, WL Venter (CA (SA)).
2017 Performance Overview
- Number of properties: 19
- 2% vacancy rate
- R135/m2 monthly weighted average gross rental/m2 for retail
sector
- R142/m2 monthly weighted average base rental/m2 for health
care sector
- 99% retail sector & 1% health care sector
- 89% (GLA) national tenants
- 186 000m2 total built m2 of property portfolio
- R2,63 billion property portfolio value.
Income generating property portfolio for the year ending
31 March 2017
Atlyn Mnandi
Denlyn Atterridge- Atteridge-
Mamelodi, Ville, Ville,
Gauteng Gauteng Gauteng
Geographic
Trading since 2003 2006 2015
Total built area 43 450m2 41 200m2 10 550m2
Occupation levels 100% 100% 93%
National tenants 91% 90% 86%
Number of shops 109 95 31
Annual trading
density/m2
for 2017 R43 600/m2 R30 500/m2 R18 100/m2
The Soweto
Thabong Victorian Day Hospital
Sebokeng, Heidelberg, Soweto,
Gauteng Gauteng Gauteng
Geographic
Trading since 2007 1997 2016
Total built area 43 100m2 15 400m2 2 817m2
Occupation levels 100% 96% 100%
National tenants 89% 95% N/A
Number of shops 104 40 N/A
Annual trading
density/m2
for 2017 R24 100/m2 R42 200/m2 N/A
Platz am Meer
Swakopmund,
Namibia
Geographic
Trading since 2016
Total built area 29 500m2
Occupation levels 91%
National tenants 84%
Number of shops 70
Annual trading density/m2 for 2017 R32 200/m2
Chairman and Chief Executive Officer’s report
Safari's aspiration is not to follow the competition, but to
exceed our own expectations, to break our own records; to ensure
that our positive impact on our tenants, shareholders and society
at large is greater this year than last.
The exceptional qualities and resilience of Safari's operations
delivered another year of positive results. Our unique portfolio
in key locations showed sustained growth despite uncertainties in
the current political and economic climate. Listed as a retail-
focused REIT on the JSE, Safari is aware of the benefits targeted
by investors in selecting this investment vehicle.
Our experience at Safari has been that the primary focus on retail
produces higher distribution growth than residential, office or
industrial specialised properties can deliver. Retail produces
a more predictable rental income stream and thrives under hands-on
revenue-enhancing asset management. As consumers demand a higher
standard of shopping experience, more choices, convenient access
and quality brands together with new supply and selective
redevelopment opportunities continue to be triggered; but location
remains critical. While large metropolitan malls may not currently
be the most compelling investments, we find that a fair measure
of opportunities remain for the underdeveloped urban retail market
in South Africa. Safari is proud to be a REIT in this arena and
while the preference for the retail sector remains, we will
continue with this focused approach.
We are pleased to share our highlights for the year:
- The portfolio increased at approximately 20% per year from
listing on the JSE in 2014 to R2,63 billion today;
- Our vacancy factor improved from 4% to 2%;
- National retailers occupy approximately 90% of our portfolio
space – a foundation for sustainable and reliable income streams;
- Property revenue year-on-year increased by 20% to R203,4 million
for the year;
- Operating profit of R145 million, a 17% increase for the year;
and
- 82% of operating profit distributed to shareholders with a next
distribution due July 2017 of 34 cents per share.
Apart from closely monitoring the performance of the portfolio,
we addressed its quality and aesthetics during the year. We work
closely with our consultants, local authorities and communities
to create facilities characterised by quality design and with
efficient transport links to jobs and amenities. During the year
we launched a complete fibre network and connectivity
infrastructure for the property portfolio, providing high-speed
reliable fibre to the facilities. High-speed wi-fi on site with
access to tenant and retailer information adds significant value
to a facility, not only for our tenants but also for us as landlord.
Our ability to conduct real-time market research directly
impacts the services and solutions we can integrate into our
offering to tenants.
In October 2016 we celebrated the grand opening of Safari's first
cross-border investment, the Platz am Meer lifestyle centre in
Swakopmund and landmark investment for Namibia. The development
offers opportunities, employment, and business initiatives for
the people of Namibia; and, with 84% national brands, is already
trading beyond expectations.
With an opportunity rich portfolio, an excellent pipeline of
projects is underway. Earthworks for the new Nkomo Village Centre
in Atteridgeville commenced during this financial year and the
development is set for completion during quarter 4 of 2018. New
properties are sourced carefully with an emphasis on quality and
sustainable income streams, with prime development opportunities
often centred around existing assets.
Being selective in our acquisitions, we prefer to consider well
located properties in popular underdeveloped nodes where there is
long-term value. For this reason we need to act swiftly when
quality opportunities arise. Access to stable funding and
committed financial resources is essential.
As a result of the project pipeline, which is still in an
aggressive growth phase, our gearing ratio increased in the
financial year to temporarily higher than the 40% mark as per our
strategy. This ratio should decrease to approximately 14% once
the new capital raising process is finalised. The Board approved
a private placement share issue at R7,60 subject to shareholder
approval, raising R756 600 011 in equity. Investors participating
include current shareholders Stanlib, Grindrod, Safarihold,
WDBH Investments and a new investor with whom Safari is proud to
be associated, Southern Palace Capital. The new capital raise
should bring the NAV to approximately R2,4 billion and we
anticipate improvement in liquidity of our share. We realise
that good management of our debt level is now key in order
to maintain steady growth.
The company welcomes the appointment of new financial director
Willem Venter on 1 April 2017. He previously served as Safari's
property portfolio manager and brings a wealth of experience and
hands-on knowledge of the Safari assets, now serving as a board
executive. We wish former director Zach Engelbrecht all success
in his future endeavours and thank him for his dedication to the
company over the past two years.
We thank the entire Board for their support and determination to
see our company reach new heights. We want to thank our
shareholders for their continued support and confidence.We further
extend our appreciation to our business partners,advisers,
customers and suppliers for their ongoing support and loyalty to
Safari. It is a privilege to lead a company surrounded with such
talented and optimistic people.
At Safari, we recognise that the quality of a development has a
direct impact on people's wellbeing. Our business cannot be only
about creating prime property nodes; we want to create places that
will be enjoyed and nurtured by communities for years to come.
We welcome you to take a walk through our successes, challenges
and milestones in the following pages.
JP Snyman
Chairman
FJJ Marais
Chief Executive Officer
21 June 2017
Abridged consolidated statement of financial position as at
31 March 2017
2017 2016
R'000 R'000
Assets
Non-current assets
Investment property 2 421 550 2 054 691
Fair value of investment
property 2 456 990 2 088 584
Operating lease asset (35 440) (33 893)
Intangible assets - 14
Operating lease asset 33 349 27 809
2 454 899 2 082 514
Current assets
Inventories 175 003 96 905
Trade and other receivables 14 139 28 829
Operating lease asset 2 091 6 085
Current tax receivable 1 638 1 638
Cash and cash equivalents 2 931 3 398
195 802 136 855
Total assets 2 650 701 2 219 369
Equity and liabilities
Equity
Stated capital 1 187 088 1 116 566
Retained income 476 453 439 466
1 663 541 1 556 032
Liabilities
Non-current liabilities
Interest bearing borrowings 898 433 627 233
Deferred tax 23 105 18 478
921 538 645 711
Current liabilities
Trade and other payables 15 792 11 096
Interest bearing borrowings 5 576 6 530
Bank overdraft 44 254 -
65 622 17 626
Total liabilities 987 160 663 337
Total equity and liabilities 2 650 701 2 219 369
Abridged consolidated statement of profit or loss and other
comprehensive income for the year ended 31 March 2017
2017 2016
R'000 R'000
Revenue 204 973 171 631
Property revenue 203 427 169 055
Operating lease 1 546 2 576
Other income 4 477 1 185
Operating expenses (64 889) (48 687)
Operating profit 144 561 124 129
Investment income 182 465
Fair value adjustments 74 822 (4 997)
Gross fair value adjustments 76 368 (2 421)
Operating lease (1 546) (2 576)
Finance costs (59 012) (36 254)
Profit before taxation 160 553 83 343
Taxation (4 627) (1 800)
Profit for the year 155 926 81 543
Other comprehensive income - -
Total comprehensive income for
the year 155 926 81 543
Basic earnings per share (cents) 83 46
Diluted earnings per share (cents) 83 45
Abridged consolidated statement of changes in equity for the year
ended 31 March 2017
Stated Retained Total
capital income equity
R'000 R'000 R'000
Balance at 1 April 2015 1 031 570 477 850 1 509 420
Profit for the year - 81 543 81 543
Other comprehensive income - - -
Total comprehensive income
for the year - 81 543 81 543
Capital raising fee on shares
paid for and issued
in the current year (718) - (718)
Shares issued through
capitalisation dividend 16 410 - 16 410
Shares issued through
capitalisation dividend 15 214
offer 54 090 - 54 090
REIT distribution - (119 927) (119 927)
Total contributions by and
distributions to owners of
company recognised directly
in equity 84 996 (119 927) (34 931)
Balance at 1 April 2016 1 116 566 439 466 1 556 032
Profit for the year - 155 926 155 926
Other comprehensive income - - -
Total comprehensive income
for the year - 155 926 155 926
Shares issued through
capitalisation dividend 5 928 - 5 928
Shares issued through
capitalisation dividend 13 341 - 13 341
Private placement 31 578 - 31 578
Private placement 20 000 - 20 000
Capital raising fee on shares
paid for and issued
in the current period (325) - (325)
REIT distribution - (118 939) (118 939)
Total contributions by and
distributions to owners of
company recognised directly
in equity 70 522 (118 939) (48 417)
Balance at 31 March 2017 1 187 088 476 453 1 663 541
Abridged consolidated statement of cash flows for the year ended
31 March 2017
2017 2016
R'000 R'000
Net cash used in operating activities
Cash generated from operations 84 313 43 946
Investment income 182 465
REIT distribution paid (99 668) (88 303)
Finance costs (59 012) (36 254)
Tax received - 4 295
Net cash used in operating activities (74 185) (75 851)
Net cash used in investing activities
Purchase and development of investment
property (292 037) (353 260)
Net cash used in investing activities (292 037) (353 260)
Net cash from financing activities
Proceeds on share issue 51 254 53 371
Proceeds from bank overdraft 71 142 -
Repayment of bank overdraft (47 685) -
Proceeds from interest bearing borrowings 677 330 587 061
Repayment of interest bearing borrowings (407 083) (216 691)
Net cash from financing activities 344 958 423 741
Total cash movement for the year (21 264) (5 370)
Cash at the beginning of the year 3 398 8 768
Total cash and cash equivalents at end of
the year (17 866) 3 398
Segmental reporting
The group classifies the following main segments, which is consistent
with the way in which the group reports internally:
- Atteridgeville
- Mamelodi
- Sebokeng
- Heidelberg
- Namibia
Abridged segment results, net assets, include items directly
attributable to a segment as well as those that can be allocated on a
reasonable basis.
Atteridge-
ville Mamelodi Sebokeng Heidelberg
R'000 R'000 R'000 R'000
31 March 2017
Turnover (external) 58 404 61 364 47 874 17 048
Reportable segment
profit before
investment revenue,
fair value adjustments
and finance costs 45 412 50 979 33 102 11 437
Unallocated reportable
segment profit before
investment revenue,
fair value adjustments
and finance costs - - - -
Profit before
investment revenue,
fair value adjustments
and finance costs - - - -
Segment assets an
liabilities
Segment assets 674 639 694 485 490 212 154 688
Unallocated assets – – – –
Total assets 674 639 694 485 490 212 154 688
Segment liabilities 3 873 3 366 3 684 671
Unallocated
liabilities - - - -
Interest bearing
borrowings - - - -
Total liabilities 3 873 3 366 3 684 671
Other segment items
Interest revenue
(external) 21 30 21 3
Unallocated interest
revenue - - - -
Investment revenue 21 30 21 3
Fair value
adjustments 63 886 86 681 66 148 3 345
Interest expense - - - -
Unallocated interest
expense - - - -
Finance costs - - - -
Reconcil-
Namibia liation Total
R'000 R'000 R'000
31 March 2017
Turnover (external) 15 918 4 365 204 973
Reportable segment profit
before investment revenue,
fair value adjustments and
finance costs 10 228 - 151 158
Unallocated reportable
segment profit before
investment revenue, fair
value adjustments and
finance costs - (6 597) (6 597)
Profit before investment
revenue, fair value
adjustments and finance
costs - - 144 561
Segment assets and liabilities
Segment assets 560 745 - 2 574 769
Unallocated assets – 75 932 75 932
Total assets 560 745 75 932 2 650 701
Segment liabilities 26 994 - 38 588
Unallocated liabilities - 44 563 44 563
Interest bearing
borrowings - 904 009 904 009
Total liabilities 26 994 948 572 987 160
Other segment items
Interest revenue
(external) - - 75
Unallocated interest
revenue - 107 107
Investment revenue - 107 182
Fair value adjustments (137 805) (5 887) 76 368
Interest expense - - -
Unallocated interest
expense - 59 012 59 012
Finance costs - 59 012 59 012
Atteridge-
ville Mamelodi Sebokeng Heidelberg
R'000 R'000 R'000 R'000
31 March 2016
Turnover (external) 51 732 57 283 45 448 15 843
Reportable segment
profit before
investment revenue,
fair value adjustments
and finance costs 40 247 47 194 31 768 10 775
Unallocated reportable
segment profit before
investment revenue,
fair value adjustments
and finance costs - - - -
Profit before
investment revenue,
fair value
adjustments and
finance costs - - - -
Segment assets and
liabilities
Segment assets 596 672 582 030 383 047 143 598
Unallocated assets – – – –
Total assets 596 672 582 030 383 047 143 598
Segment liabilities 3 370 3 267 2 785 588
Unallocated
liabilities - - - -
Interest bearing
borrowings - - - -
Total liabilities 3 370 3 267 2 785 588
Other segment items
Interest revenue
(external) 4 4 10 1
Unallocated interest
revenue - - - -
Investment revenue 4 4 10 1
Fair value
adjustments (29 505) 43 072 (41 355) (9 939)
Interest expense - - (20) -
Unallocated interest
expense - - - -
Finance costs - - (20) -
Reconcil-
Namibia liation Total
R'000 R'000 R'000
31 March 2016
Turnover (external) 86 - 170 392
Reportable segment profit
before investment revenue,
fair value adjustments and
finance costs (869) - 129 115
Unallocated reportable segment
profit before investment revenue,
fair value adjustments and
finance costs - (4 986) (4 986)
Profit before investment
revenue, fair value
adjustments and finance
costs - - 124 129
Segment assets and liabilities
Segment assets 440 858 - 2 146 205
Unallocated assets - 73 164 73 164
Total assets 440 858 73 164 2 219 369
Segment liabilities 504 - 10 514
Unallocated liabilities - 19 060 19 060
Interest bearing
borrowings - 633 763 633 763
Total liabilities 504 652 823 663 337
Other segment items
Interest revenue
(external) 2 - 21
Unallocated interest
revenue - 444 444
Investment revenue 2 444 465
Fair value adjustments 24 753 10 553 (2 421)
Interest expense - - (20)
Unallocated interest
expense - (36 234) (36 234)
Finance costs - (36 234) (36 254)
Earnings per share for the year ended 31 March 2017
2017 2016
R’000 R'000
Earnings used in the calculation of basic
earnings per
share (profit after tax) 155 926 81 543
Ordinary shares in issue at year end 191 257 182 182
Weighted average number of ordinary
shares 186 837 177 386
Headline earnings 79 558 83 964
Basic earnings per share (cents) 83 46
Diluted earnings per share (cents) 83 45
Basic headline earnings per share (cents) 43 47
Diluted headline earnings per share
(cents) 43 46
Headline earnings reconcilliation
Basic earnings (profit after tax) 155 926 81 543
Gains and losses from the adjustment to
the fair value of non-current assets (76 368) 2 421
Headline earnings 79 558 83 964
Net asset value per share for the year ended
31 March 2017
2017 2016
R'000 R'000
Total assets 2 650 701 2 219 369
Total liabilities (987 160) (663 337)
1 663 541 1 556 032
Ordinary shares in issue (note 10) 191 257 182 182
Net asset value per share (cents) 870 854
Tangible net asset value (cents) 870 854
Explanatory notes to the abridged consolidated statement of financial
position and abridged consolidated statement of comprehensive income
for the year ended 31 March 2017:
1. It is the group's policy to have the entire investment property
portfolio valued on an annual basis by an independent valuer. The
group's investment properties comprise both completed developments
as well as developments under construction. There was R292 037 000
additional capital expenditure during the year.
The value of the property portfolio increased by 20% from 31 March
2016, due to cost capitalised in the construction of the
Platz am Meer Waterfront Shopping Centre, Thabong Shopping Centre
Phase 4, ground work at Nkomo Village and Mamelodi K-Block
extension.The construction costs are financed by the interest
bearing borrowings.
The valuation of investment property (except for the property
valuations based on the direct comparable method) was based on
the discounted cash flow method. The valuation of investment property
(Erf 9043, 9044, 9045 Atteridgeville Ext 5, Farm Pretoria Town and
Townlands 351 and Erf 68 of the Lynnwood property and the subsidary's
property was based on the direct comparable method, plus
development cost. This method was used as the erven identified above
are new stands purchased, which are not yet income earning
(not yet generating cash flow).
These valuations are considered to be Level 3 on the fair value
hierarchy as per IFRS 13 Fair Value Measurement. There have been no
movements of inputs between fair value hierarchy levels nor have
there been any changes in the methods of valuation as mentioned above.
If the valuer were to increase both the capitalisation and discount
rates by 0,50% the total valuation would decrease by R113 845 000.
If the valuer were to decrease both the capitalisation and discount
rates by 0,50% the total valuation would increase by R140 872 000.
This announcement does not include all the information required
pursuant to paragraph 16A(j) of IAS 34. The full annual financial
statements are available on the issuer’s website, at the issuer'S
registered offices and upon request.
2. Most of Safari's current lease agreements are in the second half
of the signed lease period. Sufficient new lease agreements and
renewals are in place; escalations of 8% have been achieved for
new leases negotiated.
3. 30% of Erf 71, Swakopmund, Erongo Region, Registration
division G, being residential units to be erected and constructed
on the land. The reason for the classification as inventory is that
the development on this part of the property will be sold as
residential units in the ordinary course of business. The net
realisable value of inventory has been valued by an independent
external valuer, who has considered all aspects of the inventory.
The inventory has been valued using the "direct comparable method"
and recognised at the lower of cost and net realisable value less
cost to sell in terms of IAS 2 Inventories.
4. During 2017 Safari distributed 32 cents per share in June 2016,
and 32 cents per share in December 2016. The total distribution
declared was R118 939 055 (2016: R119 926 850) resulting in a 1%
decrease year on year. The company made a net payment of R99 668 459
to shareholders. A total of R19 270 596 was reinvested through a
dividend reinvestment plan which resulted in 2 496 380 new shares
issued.
5. Trade and other receivables fluctuated between the comparative
periods, due to the value added tax (VAT) receivable from the
South African/Namibia Revenue Services for the financial period
under review. The VAT receivable is due to the current construction
projects at the various properties.
Trade and other payables consists of deposits (tenants) held at
current retail centres, income received in advance and accrued
expenses.
6. The bulk of current and non-current liabilities were directly
related to the facilities being utilised to finance the project
development of Platz am Meer Waterfront Centre, Mamelodi K-Block,
Mnandi left-in, Thabong Shopping Centre (Phase 4), Soweto Day
Hospital and Nkomo Village.
7. The property revenue increased by 20% compared with the previous
year's results. The additional increase over and above the annual
escalation is due to the opening of Platz am Meer Waterfront Shopping
Centre (22 September 2016), Denlyn Shopping Centre extentions and
Thabong Shopping Centre extensions.
8. The operating expenses as a percentage of property revenue was
30% (2016: 29%), due to the extensions and additional properties
coming into operation (Platz am Meer new shopping centre opening an
additional 29 500m2, Thabong extensions of 1 902m2, Denlyn Shopping
Centre extensions of 714m2).
9. The movement in the tax balance is due to deferred tax on income
received in advance, lease straight-lining and wear and tear
allowances claimed in terms of Section 11 E of the Income Tax Act.
Notes to the abridged financial statements
Basis of preparation
The abridged consolidated financial statements are prepared in
accordance with the requirements of the JSE Limited Listings
Requirements for abridged reports and the requirements of the
Companies Act of South Africa, as amended. The JSE Listings
Requirements require abridged reports to be prepared in accordance
with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards (IFRS),
the SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee and Financial Pronouncements as issued by
Financial Reporting Standards Council and to also, as a minimum,
contain the information required by International Accounting
Standard (IAS 34) Interim Financial Reporting. The accounting
policies applied in the preparation of the abridged consolidated
financial statements are in terms of IFRS and are consistent with
those applied in the previous financial statements except for
borrowing cost (IAS 23). During the year ended 31 March 2017, the
group has elected to change its accounting policy in terms of IAS
23 Borrowing Costs, to capitalise the borrowing costs on qualifying
assets and developments. There would be no material impact on the
prior year profits, distributions or the retained income balance if
this change is retrospectively applied. The prior year financial
statement has subsequently not been restated.
Financial statements
The consolidated financial statements for the year ending 31 March
2017 have been audited by Deloitte & Touche and an unmodified
report issued, and is available for inspection at the group’s
registered office or in electronic format on the website:
www.safari-investments.com.
The abridged consolidated financial statements are extracted from
the audited financial information but are not themselves audited.
Information included under the headings "2017 Performance overview"
and "CEO and Chairman's Report" has not been audited or reviewed.
Shareholders are advised that in order to obtain a full understanding
of the nature of the auditors' engagement they should obtain a copy of
the auditor's reportwith the accompanying financial statements from
the group's registered offices. The directors take full responsibility
for the preparation of the abridged results and all financial
information has been correctly extracted from the underlying annual
financial statements.
The consolidated annual financial statements were approved by the
Board of Directors on 21 June 2017 and published on 28 June 2017.
New standards and interpretations
The accounting policies of the group have been applied
consistently to the policies as presented in the consolidated
financial statements for the year ended 31 March 2017.
Events subsequent to the reporting period
The Board accepted the resignation of Mr JZ Engelbrecht from the
Board as Financial Director with effect from 31 March 2017.
Mr WL Venter was appointed by the board as Financial Director
effective 1 April 2017. Mr Venter is a qualified chartered
accountant and was the property portfolio manager for Safari over
the last six years. The Board welcomed Mr Venter to the team and
looks forward to benefiting from his expertise and contributions
in the years to come.The Board approved the capital raising
through a private placement share issue of 99 552 633 new shares
issued for cash subject to shareholder approval. The special
shareholders meeting will be held during July 2017 and a circular
and SENS announcementwith the relevant detail will be distributed
to shareholders in due course.
The salient features of this transaction include:
- Shares will be issued at a price of R7,60 per share with total
capital raised amounting to R756 600 011; and
- Investors participating in this private placement include
current shareholders Stanlib, Grindrod (Bridge Fund Managers),
Safarihold, WDBH Investments and a new investor, Southern
Palace Capital.
A cash distribution of 34 cents per Safari share was approved
based on a scrip dividend process where shareholders will have
theoption to reinvest their cash dividend for new Safari shares
at an issue price of R7,60 per share.The directors are not aware
of any other material reportable events which occurred during and
subsequent to the reporting period.
Related-party transactions
All related-party transactions are as per approved agreements.
Cosmos Management CC (Cosmos) provided bookkeeping and property
portfolio management services to Safari and is a related party
due to the common directorship. The services rendered by Cosmos
amounted to R6,4 million (2016: R5,4 million). Safari Retail
Proprietary Limited (Retail) provided secretarial, financial and
administration services to Safari and is a related party due to
the common directorship. The services rendered by Retail amounted
to R2,8 million (2016: R1,9 million).
Safari Developments Pretoria Proprietary Limited
(Safari Developments Pretoria) and Safari Developments Swakopmund
Proprietary Limited (Safari Developments Swakopmund) entered into
various development agreements with Safari Investments RSA Limited.
Safari Investments RSA Limited provides the necessary funds to cover
the development cost. The services rendered by Safari Developments
Pretoria amounted to R82,0 million (2016: R125,1 million) and
Safari Developments Swakopmund amounted to R252,5 million
(2016: R212,1 million).
Board commentary
Profile
Safari Investments RSA Limited (Safari), with a total asset base
of R2,65 billion, is a retail-focused Real Estate Investment Trust
(REIT) listed on the Johannesburg Stock Exchange Limited (JSE)
main board under the property sector.
Safari invests in quality income-generating property; revenue is
generated through sustainable rental income. There were no changes to
the nature of the business during the financial period under review.
Property portfolio
The property portfolio consists of 19 properties. Six of the
properties are established retail centres, of which four are serving
as regionals in their areas.The Soweto Day Hospital, operational
since January 2016, also now forms part of the Safari property
portfolio. The above-mentioned properties are the income-generating
assets in the Safari portfolio. These include Denlyn in Mamelodi
(43 450m2); Atlyn (41 200m2) and Mnandi (10 550m2) in Atteridgeville;
Thabong in Sebokeng (43 100m2); The Victorian in Heidelberg (15 400m2)
Platz am Meer in Swakopmund (29 500m2) and the Soweto Day Hospital
(2 817m2). The retail centres are anchored by national retailers such
as Shoprite /Checkers, Spar and Pick n Pay. Safari’s current rental
portfolio is 99% retail based
Letting activity
Safari's vacancy factor in its portfolio at 31 March 2017 was 2%
(2016: 4%) of the total income-generating retail space which
consisted of 89% (2016: 87%) national.
Current projects
1. Thabong Phase 4 extension, which includes the addition of a
1 902m2 (including yard space of 385m2) Builders Warehouse to be
completed in the 2018 financial year.
2. Phase 1 of the Platz am Meer development in Swakopmund,
Namibia was completed with the Platz am Meer Shopping Centre
opening its doors during September 2016. It was very well received
by the Swakopmund community and is seen as a landmark development
in Namibia. Phase 2 of the Platz am Meer development being the
residential apartments will be completed in the
2018 financial year.
3. The Pick n Pay upgrade, Spur extension and refurbishment to be
completed in the 2018 financial year.
4. The Left-In from Maunde street at Mnandi Shopping Centre to be
completed in the 2018 financial year.
5. The installation of solar panels at the Platz am Meer Waterfront
is in progress and will be completed in the 2018 financial year.
6. Earth works for the Nkomo Village Shopping Centre commenced
during the 2017 financial year and the project is set for
completion during quarter 4 of 2018. This centre will be anchored
by Pick n Pay and Boxer and bringing other national tenants such
as McDonalds, Builders Warehouse and Virgin Active to the
Atteridgeville community for the first time.
Prospects
The development and extension as detailed above ensures that
Safari will maintain its attractive portfolio growth. Above-
inflation increases in utility cost and continued financial
market volatility are expected to continue. The Board is
committed to maximising the rental income streams with the
proactive letting strategy focused on national tenants, and
minimising the operating expenditure. The Board will focus on
opportunities in order to achieve sustainable long-term, recurring
distributable earnings. Any forecast in the results has not been
reviewed or reported on by the independent external auditors and
is the responsibility of the Board.
Notice of Annual General Meeting
Shareholders are hereby advised that the integrated annual
report was released today, which incorporates the notice of
annual general meeting to be held at Menlyn Boutique Hotel,
209 Tugela Road, Ashlea Gardens, Pretoria on Wednesday,
2 August 2017 at 14h00. The integrated report will also
be available on the company's website at
www.safari-investments.com.
The date on which shareholders must be recorded as such in
the share register for purposes of being entitled to attend
and vote at this meeting is Friday, 28 July 2017 with the
last day to trade being Tuesday, 25 July 2017.
By order of the Board
28 June 2017
Corporate information
Safari Investments RSA Limited
(Registration number: 2000/015002/06) JSE code: SAR
ISIN: ZAE000188280
Country of incorporation: Republic of South Africa (7 July 2000)
Registered address and place of business
420 Friesland Lane, Lynnwood, Pretoria 0081
Tel +27 (0) 12 365 1889
Fax +27 (0) 86 272 1313
E-mail: info@safari-investments.com
Website: www.safari-investments.com
Auditors
Deloitte & Touche
Riverwalk Office Park, Block B
41 Matroosberg Road, Ashlea Gardens, Pretoria 0081
Commercial banker
Absa Bank Limited
(Registration number: 1986/004794/06) Absa Towers East
170 Main Street, Johannesburg 2001
PO Box 7735, Johannesburg 2000
Group Company Secretary
Dirk Engelbrecht BComm LLB
420 Friesland Lane, Lynnwood, Pretoria
Postal: 420 Friesland Lane, Lynnwood, Pretoria 0081
Corporate adviser
Fanus Kruger Consulting Proprietary Limited
(Registration number 2015/324537/07)
67 Brink Street, Rustenburg 0299
Directors of Safari Investments RSA Limited
FN Khanyile (Independent non-executive)
SJ Kruger (Non-executive alternate)
FJJ Marais (Chief Executive Officer)
M Minnaar (Independent non-executive)
K Pashiou (Executive)
JP Snyman (Independent non-executive Chairman)
WL Venter (Executive Financial Director)
AE Wentzel (Lead independent non-executive)
Independent valuer
Mills Fitchet (Tvl) CC
(Registration number CK 89/40464/23) No 17 Tudor Park,
61 Hillcrest Avenue Oerder Park, Randburg 2115
PO Box 35345, Northcliff 2115
Legal advisers VFV Incorporated Corporate Place, Block A
39 Selati Street, Pretoria
PO Box 8636, Pretoria 0001
Sponsor
PSG Capital Proprietary Limited
(Registration number 1951/002280/06)
1st Floor, Ou Kollege Building
35 Kerk Street, Stellenbosch 7599
PO Box 7403, Stellenbosch 7599
Transfer secretaries
Computershare Investor Services Proprietary Limited
(Registration number 2004/003647) Rosebank Towers,
15 Biermann Avenue Rosebank 2196
PO Box 61051, Marshalltown 2107
Date: 28/06/2017 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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