Redefine's office vacancies forecast to fall to single digits next year
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Redefine Properties expects its South African office vacancies to fall below 10% in FY2027, targeting 7.5% by the last quarter, as the SA office property sector improves.
After years of double-digit vacancies in its expansive office portfolio, Redefine Properties says it expects vacancies to fall below the 10% level in FY2027, as the South African office property sector improves.
The property group, which has an overall portfolio in South Africa and Poland valued at over R101 billion, around R22 billion of that being SA office sector assets, shared the upbeat view in its Capital Markets Day and pre-close briefing on Wednesday in Sandton.
Redefine notes in the CMD presentation that vacancies are expected to reduce to below 10% on the back of leasing and the sale of non-core properties with vacancies. It says South Africa is seeing strengthening real estate fundamentals, as confidence improves in the sector and broader economy with traction on structural reforms.
The group, which owns landmark office properties like Alice Lane in Sandton and The Towers (formerly Standard Bank Centre) in Cape Town's CBD, is targeting lowering its office vacancies to 7.5% by the last quarter of its 2027 financial year, a further 25% reduction by the end of FY2027. Redefine's financial year ends on 31 August annually.
The group's rent reversions remain in negative double digit territory, with a forecast of -12.5% by the end of FY2026, though that is an improvement on -12.9% in FY2025. Redefine says there is limited large tenant reversion risk in the next 24 months.