Octodec Investments adjusts income outlook lower as economic landscape shifts

OCTODEC Investments, a real estate investment trust (REIT) boasting a R11.3 billion portfolio of apartments, industrial and retail properties in Johannesburg and Tshwane, has revised its distribution income growth guidance down due to an increasingly uncertain market outlook.

- EDWARD WEST

The new forecast ranges between 2% and 4% per share, a decline from the previously projected 3% to 5% growth. This shift comes in light of a changing geopolitical landscape, affecting trading conditions for the company.

Octodec’s directors highlighted Tuesday that several factors were influencing their revised outlook. Chief among them is a recent notice from the City of Tshwane vacating of 12,086 square metres of office space in the Pretoria CBD. There was also ongoing uncertainty regarding the sustainability of the Government of National Unity (GNU).

Despite the challenges, Octodec’s residential portfolio remains a beacon of resilience. Well-located and secure, the demand for its residential offerings continues to flourish. However, an unforgiving economic climate characterised by low growth, soaring unemployment, and high interest rates has resulted in financial pressure on tenants, complicating rental growth prospects.