South African shopping malls will receive R125 million in new solar projects

Redefine Group, a real estate investment trust (REIT), says it is working on R144 million in solar installations across its portfolio, which includes several large malls in South Africa.

On Monday (7 November), the group released its annual results for the fiscal year ended 31 August 2022, detailing how its current installations have helped the company save millions of rands and reduce demand on the national grid.

According to the group, solar PV projects and lighting retrofit projects saved an estimated 94 million kWh of energy, with R143.8 million in new projects currently underway. Overall, the group is investing R194 million in improving portfolio efficiency.

Solar PV, smart metering, water-efficient ablutions, and energy efficiency are all part of its retail, office, and industrial portfolio.

Solar generation now accounts for 17.8% of Redefine’s energy consumption, up from just under 6% a year ago.

Redefine currently has 29.9MWp of installed solar capacity. Moreleta Plaza, Hazeldean Square, and Shoprite Park were sold, reducing total solar installed capacity by 2.9MWp.

“Additional projects to the value of R143.8 million are underway, which will increase our total installed solar capacity to 43.2MWp,” the group said.

The group is currently constructing an additional 13.33MWp of solar capacity, which is expected to save R25.1 million in the first year of operation and R19.7 million annually.

South Coast Mall, East Rand Mall, and Centurion Mall, among others in the group’s retail portfolio, account for the majority of its solar builds, which total just under R125 million.

The table below shows how much Redefine will spend on new solar installations at each location.

Financial results

Redefine is a real estate investment trust (REIT) with a R88.9 billion property asset platform that is sectoral and geographically diverse (FY21: R72.9 billion).

The group’s portfolio is heavily weighted in South Africa, where it owns and manages retail, office, and industrial properties.

It reported strong financial results for the year, owing largely to the company’s continued recovery following the removal of Covid-19 pandemic restrictions.

For the fiscal year ended 31 August 2022, group distributable income increased by 26.1% (FY21: 2.8%) to R3.6 billion (FY21: R2.9 billion). Revenue increased 15.2% to R8.24 billion, with headline earnings per share increasing 16% to 83.80 cents.

The company declared a dividend of 19.27 cents per share for the six months ending August 20, 2022, bringing the total dividend for the year to 42.97 cents per share.

While there have been signs of recovery in retail, the sector remains challenging, according to the group, while office space remains oversupplied due to changes in how businesses now operate. However, the group is seeing an increase in the number of people returning to the office.

“Although the operating environment remains challenging, there are encouraging signs of recovery. The retail portfolio recovery continues to improve, supported by the increase in footfall at the various malls.

Restaurants, health and beauty, cinemas, and travel agencies are among the hardest hit categories, with sales remaining below pre-Covid-19 pandemic levels as consumers focus on essentials and value items, according to the report.

“The need for innovation and collaboration as well as skills transfer is fuelling the return to offices. The oversupply of office space continues to place pressure on office vacancies and rental rates, however, we have experienced good demand for quality-rated office buildings,” it said.

“The industrial sector continues to provide a defensive element to our asset platform.”