Major shopping malls in South Africa getting R125 million in new solar projects

Real Estate Investment Trust (REIT) Redefine Group says that it is working on R144 million worth of solar installations across its portfolio, including some big malls in South Africa.

The group published its annual results for the year ended 31 August 2022 on Monday (7 November), outlining how its current installations have helped save the business millions of rands and reduce demand on the national grid.

An estimated 94 million kWh of energy was saved through solar PV projects and lighting retrofit projects, the group noted, with R143.8 million in new projects underway. Overall the group is investing R194 million in improving the efficiency of its portfolio.

This includes solar PV, smart metering, water-efficient ablutions and energy efficiency across its retail, office and industrial portfolio.

According to Redefine, solar generation currently makes up 17.8% of its energy consumption, up from just under 6% a year ago.

Redefine’s current installed solar capacity is 29.9MWp. The sale of Moreleta Plaza, Hazeldean Square and Shoprite Park reduced the 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 has an additional 13.33MWp of solar builds in progress, estimated to save R25.1 million in the first year of operation and R19.7 million annually.

Malls like South Coast Mall, East Rand Mall and Centurion Mall, among others in the group’s retail portfolio, make up the biggest portion of its solar builds, totalling just under R125 million.

The table below outlines how much Redefine will be spending at each location on new solar builds.

Financial performance

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

The group’s portfolio is predominately anchored in South Africa through directly held and managed retail, office and industrial properties.

It posted strong financial results for the year, driven largely by the continued recovery post the lifting of Covid-19 pandemic restrictions.

Group distributable income grew by 26.1% (FY21: 2.8%) to R3.6 billion (FY21: R2.9 billion) for the year ended 31 August 2022. Revenue was up 15.2% to R8.24 billion, with headline earnings per share up 16% to 83.80 cents per share.

The group declared a dividend of 19.27 cents per share for the six months ending August 2022, taking the full-year dividend to 42.97 cents per share.

While there have been signs of recovery in the retail space, the sector is still challenging, the group said, while office space remains oversupplied due to the shift in how businesses now operate. However, the group is seeing more 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.

Hard-hit category retailers such as restaurants, health and beauty, cinemas and travel agents continue to trade below pre-Covid-19 pandemic levels as consumer spending is focused on essentials and value items, it said.

“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.”

Read: Massive new regional shopping mall opens its doors in South Africa – featuring its own solar plant