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IOL News
3 days ago
- Business
- IOL News
Growthpoint Properties raises DIPS growth guidance for 2025
V&A Waterfront owner Growthpoint Properties said the leisure and commercial precinct in Cape Town increased its earnings before interest and tax by 23% for the 9 months to March 31, 2025, with the performance boosted by tourism, and from a full period of office rental from Investec, and the inclusion of The Portswood and The Commodore Hotels, now owned by the V&A and managed under contract by Legacy. Image: Supplied Growthpoint Properties has upped its distributable income per share (DIPS) growth guidance to 2% to 3% for its 2025 financial year due to improved performance, better property fundamentals in South Africa, continued outperformance by the V&A Waterfront, and lower interest rates. The largest JSE-listed South African Real Investment Trust had reported DIPS growth of 3.9% at the half-year stage, compared to the initial full-year 2025 guidance of a decrease in DIPS of 2% to 5%. In March, the full-year guidance was updated to DIPS growth of 1% to 3%. But a strong performance, as indicated by Thursday's trading statement, resulted in the guidance being lifted once more. Growthpoint management said growth would be offset somewhat by lower offshore income due to the sale of their stake in Capital & Regional (C&R). In an investor update for the 9 months to March 31, management said several positive local developments had supported the group's performance in spite of a decline in the Business Confidence Index in the second quarter, as reported by RMB/BER this month. These included longer periods without load shedding and a favourable interest rate outlook. All three of the domestic portfolios showed improved performance. 'We have a strong set of initiatives, both innovative and established, in place to keep improving the quality of our portfolios and underlying operational metrics,' they said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Growthpoint Investment Partners (GIP) was performing as expected. The V&A continued to exceed expectations, supported by increased tourism and asset management that was unlocking the precinct's opportunities. The group's international investments were expected to continue performing in line with guidance. A target had been to dispose of non-core assets of R2.8bn for the year, by reducing exposure to the office sector, disposing of older industrial and manufacturing assets, exiting non-core retail properties in deteriorating central business districts, as well as smaller retail and specialised assets such as motor dealerships. However, transfers of properties sold were taking longer than expected due to delays in Competition Commission approvals, rates clearance certificates, and registration at the Deeds Office. 'We sold and transferred 15 non-core assets for R1.1bn. An additional R445m transferred since April 1, while assets worth R1.2bn were still awaiting transfer, of which R783.2m is expected to transfer by June 30, 2025, bringing anticipated disposals for the year to R2.3bn, R500m less than the target.' Of disposals awaiting transfer, R783.2m related to the sale of 11 Adderley, Golden Acre, and Grand Parade, which had been lodged at the Deeds Office. Some R1.2bn of development and capital expenditure was incurred for the SA portfolio, including the redevelopment of Bayside Mall, Table View (R147.1m), The Hilton Canopy Hotel, Longkloof Studios, Gardens (R192.8m), 36 Hans Strijdom Avenue, CBD (R103.7m), and R147.4m to develop modern logistics warehouses in the Western Cape. In the South Africa portfolio, key indicators showed 'pleasing improvements across all three sectors.' Vacancies improved to 8.4% from 8.7% at June 30, 2024, and were slightly above 8.3% at December 31, 2024. The increase is largely due to the addition of vacancy from the newly completed speculative development, Arterial Industrial Park Phase 2 in Cape Town. Notably, the office sector vacancies improved to 14.7% from 15.9% at the half-year. National market data showed that, while earlier improvement was evident, future vacancy reductions may plateau due to structural changes in employment and the tenant mix. At Globalworth Real Estate Investments in central and eastern Europe, a decrease in dividend income was expected due to the increase in their cost of debt resulting from their bond refinance in May 2024. In the logistics and industrial portfolio, vacancies improved to 4.4% from 5.2%, primarily due to the leasing of new speculative developments, albeit higher than 3.5% recorded at the half-year stage. At the V&A, earnings before interest and tax (EBIT) grew by 23%. This was from a full period of office rental from Investec and the inclusion of The Portswood and The Commodore Hotels, now owned by the V&A and managed under contract by Legacy. Visit:
IOL News
3 days ago
- Business
- IOL News
Business sentiment wanes in South Africa as economic uncertainty lingers
South African Chamber of Commerce and Industry (SACCI) said while releasing their Business Confidence Index (BCI) on Wednesday that the BCI dipped by 8.6 index points in April to 114.9 but clawed back some 0.9 index points in May 2025 to measure 115.8. SACCI said that the index remains higher than it was in May 2024. Image: Karen Sandison/Independent Newspapers Sentiment in the business sector in South Africa has remained volatile despite a minor rebound following fears over US trade policy, including former President Trump's threat to impose 30% tariffs. The latest release of the Business Confidence Index (BCI) by the South African Chamber of Commerce and Industry (Sacci) has revealed a complicated landscape for businesses, as the index experienced a notable fluctuation in recent months. The BCI dropped by 8.6 index points in April to a measure of 114.9, before recovering slightly by 0.9 index points in May, culminating in a score of 115.8. Waldo Krugell, economics professor at North-West University, said that this decline was in line with other high-frequency data indicators. 'Basically, it's businesses that are now more pessimistic about the prospects for doing business during the course of this year,' Krugell said. 'This loss of momentum speaks to consumers not spending as much as expected. Even in the investment numbers last week we saw a decline in investment indicating people are less confident and expect a slowing of the economy.' Despite this minor rebound, Sacci highlighted that the BCI still stands 8.0 index points higher than the same period last year, signalling a year-on-year improvement in business confidence. In its analysis, Sacci noted that the volatility between April and May was characterised by mixed performances across the index's 14 sub-indices, where six improved, six declined, and two remained neutral. Factors contributing positively to sentiment include a strengthened rand exchange rate, surging share prices on the Johannesburg Stock Exchange (JSE), and high prices for key commodities like gold and platinum. Year-on-year comparisons show a brighter outlook, with the BCI being 6 and 8 index points above the levels recorded in April and May of the previous year respectively. Contributing to this optimistic trend are increased numbers of inbound tourists, a rise in new vehicle sales, lower inflation, and elevated global prices for precious metals. Nevertheless, fluctuating merchandise export volumes and the diminishing real value of building plans continue to cast shadows on the business climate. Sacci emphasised the need for substantive economic growth to enhance the well-being of South Africans. The Chamber pointed out the disconcerting reality that the country's performance of merely 0.8% year-on-year growth reported for the first quarter of 2025 falls significantly short of what is necessary to tackle escalating unemployment and foster an inclusive economic environment. Programmes to attract investment must be prioritised to combat concerns that deter foreign and domestic investors. North-West University Business School economist, Professor Raymond Parsons, said if taken together with other high-frequency economic data, the BCI showed a mixed picture of the current business mood. 'Obviously global factors also play a role. But as Sacci itself emphasises, the domestic policy environment must become more conducive to boosting investor confidence,' Parsons said. 'This means South Africa needs to improve on the present consensus forecasts of only about 1% GDP growth in 2025. Translating positive short-term business confidence trends into longer-term investor confidence is therefore the challenge presently facing South African policymakers at various levels.'
IOL News
06-06-2025
- Business
- IOL News
Western Cape's economic growth surges despite national challenges
Western Cape Premier Alan Winde and Economic Development MEC Dr Ivan Meyer say strong agricultural growth and investor confidence continue to drive the province's economy forward. Image: Armand Hough / Independent Newspapers Despite national economic challenges, the Western Cape has once again emerged as South Africa's most resilient province, posting positive GDP growth and topping the country's Business Confidence Index (BCI) rankings for the second quarter of 2025. According to newly released figures, the province's BCI dipped only slightly from 52 to 51 but remains well above Gauteng's 37 and KwaZulu-Natal's 24, as well as the national BCI of 40. The index, which measures business sentiment based on key economic indicators such as exports and energy supply, signals continued confidence in the province's economic trajectory. Premier Alan Winde and Western Cape Minister of Agriculture, Economic Development and Tourism, Dr Ivan Meyer, credited the sustained optimism to the Western Cape's strong agricultural performance and strategic economic planning. 'Our commitment to doing everything we can to grow the economy and create jobs is showing in independently verified numbers,' said Winde. 'But we still have so much more to do. While I am pleased with these numbers, we will not relent in our commitment to ensure that more of our residents have a chance to get a job.' The province's GDP grew by 0.5% quarter-on-quarter and 0.9% year-on-year, driven largely by the agriculture, forestry, and fishing sector, which surged by 15.8%. This translated into an estimated R3.12 billion increase in the provincial GDP, underscoring agriculture's vital role in economic recovery. 'Strong business confidence is not an accident,' Winde said. 'This is the result of our hard work in ensuring the Western Cape is the easiest province to do business in. It is a vital indicator of how we are faring in growing our economy to create more jobs, despite a constrained fiscal environment.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ The Western Cape remains the only province with positive business sentiment, attributed in large part to its Growth for Jobs (G4J) strategy. Officials say the plan prioritises job creation through private sector investment, infrastructure development, and export growth. 'Notwithstanding significant headwinds, such as the impact of global trade uncertainty, business confidence in our province remains positive. If the private sector thrives, we all thrive, and more of our residents have the chance to get a job,' Winde said. The data affirms the Western Cape's status as a beacon of economic stability in South Africa's turbulent economic landscape. IOL News Get your news on the go, click here to join the IOL News WhatsApp channel.
The Citizen
04-06-2025
- Business
- The Citizen
Business confidence tanks in second quarter due to pessimism about trading conditions
When business confidence is low, businesses are not investing, and the low level in the second quarter will definitely not help. Business confidence tanked in the second quarter of 2025 due to pessimism about trading conditions. The survey among business owners took place during May, when there was also a lot of tension between South Africa and the US. The RMB/BER Business Confidence Index (BCI) decreased by five points to 40 in the second quarter of 2025, after the recovery that started in the first half of 2024 stalled in the first quarter of 2025. This implies that only four out of ten business respondents in the most cyclically sensitive sectors of the economy were satisfied with prevailing business conditions, Isaah Mhlanga, chief economist at RMB, says. 'While remaining above the average of 2023 and 2024, confidence is now a touch below the long-term average level. The underlying survey results point to a loss of momentum in the South African economy.' He says some optimism returned to equity markets after a 90-day pause in the US reciprocal trade tariffs announced on Liberation Day, but the global trade uncertainty and continued local logistical issues were still flagged by respondents as factors negatively affecting their businesses. ALSO READ: No fireworks expected, but GDP figures are disappointing — economists Rand recovered and GNU looks more stable but did not boost business confidence The rand exchange rate also experienced a volatile quarter, weakening past R19.90/$ early in April but clawing its way back to below R18/$ during the survey period. On the local front, respondents would have known that the contentious proposed VAT hike was off the table, but many questionnaires were returned before the tabling of Budget 3.0 on 21 May. News around the government of national unity (GNU) and the DA's continued participation in it was mixed over the time period, with fears of an imminent collapse easing a little through May, Mahlanga says. Business confidence was driven by declines in four of the five sectors in the second quarter, partially offset by a sharp increase in wholesale trade confidence, leaving overall confidence lower. Mahlanga says this almost mirrored the previous quarter outcome, where declines in four of the five sectors were more than fully offset by a sharp increase in new vehicle dealer confidence, resulting in overall confidence rising. In addition to being the only sector to register an increase in confidence, wholesale traders also have the highest sentiment reading at 50 points. Non-consumer wholesale traders fared well during the quarter, but consumer goods traders suffered and faced a sharp drop in sales. 'This is a worrying sign for consumer demand in the second half of the year, despite supportive macroeconomic factors such as low inflation, interest rate cuts and two-pot pension fund payouts.' ALSO READ: Surprise that all MPC members were in favour of repo rate cut Business confidence in retail trade sector also deteriorated For now, business conditions in the retail trade sector remained largely in line with the long-term average, although confidence deteriorated by 8 points to 42. Motor trade dealers saw a slightly bigger drop of 10 points, but also to 42 in the second quarter. Generally, Mahlanga says, respondents in the sector remained fairly upbeat about business conditions and sales volumes, which underscores that the consumer likely still fared fairly well in the second quarter. He says the 25-basis-point reduction in the repo rate, which took place after the survey period but was largely expected, could provide some further support, although this is countered by an increased personal tax burden. However, building contractors in the residential sector have not yet benefited from past rate cuts, and the cut last week may also be insufficient to turn their fortunes around. According to the second quarter results, activity came under further pressure, which weighed on sentiment. Non-residential contractors, on the other hand, fared better, but overall confidence among all building contractors decreased by 10 points to an almost three-year low of 35 points. ALSO READ: Manufacturing PMI falls to lowest level since April 2020 — bad news for GDP Business confidence in manufacturing sector remains very low Despite a notable deterioration in business conditions, confidence in the manufacturing sector remained virtually unchanged at a low 33 points, with manufacturers reporting a decline in domestic and export demand, leading to a drop in production. Many of the constraint indicators, including the general political climate, increased in the second quarter. Mahlanga says the warning lights from last quarter are certainly flickering brighter. 'The fact that confidence in four of the five sub-sectors declined and that [for two consecutive quarters] confidence in three of the five sub-sectors declined suggests that momentum in overall economic activity slowed down. 'During this period, just two sectors, wholesalers and new vehicle dealers, alternated to do the heavy lifting, but it was insufficient to lift confidence this quarter.' He says after the meagre 0.1% quarter-on-quarter gross domestic product (GDP) growth rate recorded in the first quarter, we cannot risk losing any further momentum. 'The reduction in the repo rate will provide some relief, but more is needed to reignite the spark in the South African economy. There is arguably more certainty on the local political front, with Budget 3.0 tabled and broad agreement among GNU partners to continue working together for now. 'The global environment will remain uncertain, but an easing of tension regarding diplomatic relations between the US and South Africa should support sentiment.' ALSO READ: This is where we would be if SA sustained an economic growth rate of 4.5% Experts agree we need structural economic reforms to boost business confidence Mahlanga says the core of South Africa's long-term economic recovery and resilience remains faster implementation of structural economic reforms. 'Without these reforms, the economy will remain vulnerable to global economic shocks and too slow to reduce the social ills that burden many with unemployment, poverty and inequality.' Jacques Nel, head for Africa Macro at Oxford Economics Africa, says the business confidence survey results are particularly concerning after the 1.7% drop in gross fixed capital formation in the first quarter. 'Businesses are not investing, and the uncertainty pervasive throughout the second quarter would have only dampened investment appetite further. Recent developments, including a more favourable monetary environment with benign inflation and lower interest rates and signs of improvement in US-SA relations, will boost confidence, but the risk is that this will be another lost quarter with economic momentum slowing down further.'
IOL News
04-06-2025
- Business
- IOL News
South African business confidence dips in quarter two, signaling economic slowdown
The RMB/BER Business Confidence Index (BCI) fell by five points to 40 in the second quarter of 2025, reflecting pessimism about trading conditions amid a loss of economic momentum in South Africa . The decline follows a stalled recovery from the first half of 2024, with only 40% of respondents in cyclically sensitive sectors expressing satisfaction with business conditions. The data comes a day after Statistics SA said South Africa's gross domestic product increased by 0.1% in the first quarter of 2025, down from the increase of 0.4% in the fourth quarter of 2024. The survey, conducted from May 7 to May 26, 2025, highlighted global trade uncertainties, strained US-South Africa diplomatic relations, and local logistical challenges as key drags on sentiment. "The majority of the respondents are thus pessimistic about trading conditions. While remaining above the average of 2023 and 2024, confidence is now a touch below the long-term average level," it said. The rand's volatility, peaking past R19.90 to the dollar in April before recovering to below R18 to the dollar, added to the unease. While the scrapping of a proposed VAT hike provided some relief, mixed signals about the stability of the Government of National Unity and the Democratic Alliance's role in it further clouded the outlook, RMB said. The second quarter confidence print was driven by declines in four of the five sectors, partially offset by a sharp increase in wholesale trade confidence, leaving overall confidence lower. This almost mirrored the previous quarter outcome, where declines in four of the five sectors were more than fully offset by a sharp increase in new vehicle dealer confidence, resulting in overall confidence rising. Sectoral Performance Wholesale Trade : The only sector to report higher confidence, rising to 50 points. Non-consumer goods traders performed strongly, but consumer goods traders saw a sharp drop in sales, raising concerns about weakening consumer demand despite supportive factors like low inflation, interest rate cuts, and two-pot pension payouts. : The only sector to report higher confidence, rising to 50 points. Non-consumer goods traders performed strongly, but consumer goods traders saw a sharp drop in sales, raising concerns about weakening consumer demand despite supportive factors like low inflation, interest rate cuts, and two-pot pension payouts. Retail and Motor Trade : Both sectors saw confidence decline to 42 points, down 8 and 10 points, respectively. Retail and motor trade respondents remained relatively optimistic about sales volumes, supported by a 25-basis-point interest rate cut post-survey, though higher personal taxes may offset this boost. : Both sectors saw confidence decline to 42 points, down 8 and 10 points, respectively. Retail and motor trade respondents remained relatively optimistic about sales volumes, supported by a 25-basis-point interest rate cut post-survey, though higher personal taxes may offset this boost. Building Contractors : Confidence dropped 10 points to a near three-year low of 35. Residential contractors faced ongoing pressure despite prior rate cuts, while non-residential contractors performed better but could not prevent the overall decline. : Confidence dropped 10 points to a near three-year low of 35. Residential contractors faced ongoing pressure despite prior rate cuts, while non-residential contractors performed better but could not prevent the overall decline. Manufacturing: Confidence held steady at a low 33 points despite worsening conditions, with declines in domestic and export demand driving lower production. Political climate concerns also intensified. RMB said that last quarter's warning lights are "certainly flickering brighter". 'The fact that confidence in four of the five sub-sectors declined and that (for two consecutive quarters) confidence in three of the five sub-sectors declined suggests that momentum in overall economic activity slowed down. During this period, just two sectors–wholesalers and new vehicle dealers–alternated to do the heavy lifting, but it was insufficient to lift confidence this quarter,' it said. RMB said following the meagre 0.1% quarter on quarter GDP growth rate recorded in the first quarter of 2025, 'we cannot risk losing any further momentum." It said the reduction in the repo rate will provide some relief, but more is needed to reignite the spark in the South African economy. "There is arguably more certainty on the local political front, with Budget 3.0 tabled and broad agreement among GNU partners to continue working together for now. The global environment will remain uncertain, but an easing of tension regarding diplomatic relations between the US and South Africa would support sentiment," it said. Kristof Kruger, senior Fixed Income Trader at Prescient Securities, said the overall growth trajectory for 2025 remains subdued. South Africa's economic fundamentals continue to face several headwinds, including: Structural issues like energy shortages and high unemployment, like energy shortages and high unemployment, Global trade uncertainty and slow growth in key trading partners, and slow growth in key trading partners, Domestic policy challenges and a lack of political cohesion within the government. BUSINESS REPORT
