Redefine office sector pain

RENT: REVERSIONS IN NEGATIVE TERRITORY

- Suren Naidoo

• Property group forced to cut rentals to tenants as sector headache persists.

Despite JSE-listed Redefine Properties punting the SA commercial property market being in the midst of a turnaround during its annual results presentation on Monday, it seems its office sector headache is far from over.

Redefine's rent reversions for its R21.5 billion local office portfolio for FY2024 worsened to -13.9%, from -12.1% in FY2023. This means it continues to cut office rents to retain tenants, with SA's broader office market still in a glut and overall national office vacancies remaining in the double digits.

The property giant did report a slightly better office occupancy rate of 88.8% (versus 88.6% last year).

Put differently, its office vacancy for FY2024 came in at 11.2%, which nevertheless is below the national office vacancy rate of around 14%.

During the results presentation, Redefine's chief operating officer Leon Kok and CFO Ntobeko Nyawo were both frank about the office market still being challenging.