Our opinion on the current state of SAR

Safari (SAR) is a real estate investment trust (REIT). The company owns 7 operational properties in South Africa - 8 retail outlets and one day-care center with a total value of R3,46bn and a vacancy of 3,03%. Six of the seven retail outlets are in Gauteng. The group's gross lettable area (GLA) in South Africa is 175 167 square meters with arrears of 2,2%. The share is thinly traded with many days where there is no volume. On 18th August 2021 the company gave an update on the impact of the unrest and looting. It said, "Nkomo Village Centre in Atteridgeville and Denlyn Centre in Mamelodi suffered minimal damage while only Thabong centre in Sebokeng suffered structural damage. Nkomo Village and Denlyn centre were closed for two days to effect necessary repairs. Thabong Centre partially opened on Friday 6 August 2021 with the majority of its tenants commencing with trade. The Company has registered a claim with its insurers for the damages and also a claim for loss of rental income due to business interruption". In its results for the six months to 30th September 2023 the company reported operating profit up 8,15% and occupancy at 97,8%. The company's net asset value (NAV) increased 6,42% to 945c per share. Headline earnings per share (HEPS) fell 13,8%. The company said, "Despite the increase in revenue, distributable earnings decreased compared to the comparative interim period due to a substantial non-recurring insurance pay-out received in the prior period; the surge in interest rates; as well as other irregular expense items". We see this share as good value at current levels although trade in the share tends to be patchy.