NOVA PROPERTY GROUP: Developments Continue at Super Nova

At its heart, explains CEO Dominique Haese, Nova Properties is a specialist management company that itself owns a packed portfolio of residential, commercial, and mixed-use property, and fulfils a particular and specialised rental collection and administrative function towards all of the many properties therein.

These take in primarily office and retail spaces, toward which Nova is charged with the critical task of working with a vast range of tenants and business sizes, from one-man-band outfits to some of the biggest names in industry, such as Pick n Pay, Checkers and Dischem. The residential arm of the business is concerned with development, where the land is paid for, rights and infrastructure and architectural plans in place, and all feasibilities have been compiled, analysed, and completed.

“Over the years, this portfolio has proven itself to be versatile and sustainable,” Haese lauds. “Testament to Nova Properties’ focus on strategic re-development, planning and stringent management measures, our portfolio is consistently well-maintained through mainly internal funding, targeting efficient tenanting and value enhancement.”

COMMERCIAL CONCERNS

Mostly Gauteng- and Nelspruit-based on the commercial side, the residential portfolio concentrates on eight geographical hubs, all selected for their development and growth potential. Within this section there lies a sharpened focus on three models, namely build-to-sell, re-zoning, and rental stock, which aims to unlock long-term bottom-line value from this primarily land-based asset portfolio.

“For a decade the Nova Properties has been fortunate to be able to surround itself with teams of highly-skilled, passionate, and dedicated professionals and partners in driving these projects and readying them for when funding lines become available,” Haese tells Enterprise Africa. “We have actually consciously reduced our footprint as time has gone on, moving away from coastal areas where we were previously, for example in Cape Town and Durban, in order to be much more central and hands-on.”

When it comes to commercial property a holistic approach is taken, Haese goes on, with 15 property-owning subsidiaries working together including Geo Sphere Developments, which itself owns three further ancillary companies. “In the commercial property space, Nova Properties aims to consistently rejuvenate and maintain its portfolio of assets in order to attract a tenant mix that is both relevant for the location and long-lived, in order to create stable, yet outstanding consumer experiences for the communities that are served by them,” Haese unpacks.

“This is realised by a strong, experienced management team, while external contracted service providers expertly take care of accounting, finance, tax, and legal and stakeholder administration services. Broadly speaking,” says Haese, “these service providers focus on reducing tenant vacancies to maximise capital growth for Nova Properties.

“In this way, under-performing tenants are actively reduced, while each property’s tenant mix is analysed to optimise trading density and growth. Indicators like ‘spend-per-head’ and ‘feet through the door’ are monitored as reflections of trading density, which shows year-on-year improvement across the portfolio.”

Working collaboratively and cohesively, the combined resources and management and industry expertise of these providers facilitate advanced asset redevelopment planning. “This long-term planning, as an enabler for reducing tenant vacancies by enhancing the value proposition and reducing the impact of redevelopment, contributes directly to enhancing our bottom-line – one of our primary aims as a Group.”

SECURELY ANCHORED

Having sought and acquired such a broad and varied range of tenants helped Nova Properties to navigate through the tricky waters of recent years, Haese delineates. “The huge anchor tenants, which form a large part of our centres like Pick n Pay, were allowed to continue throughout,” she says, “which prevented us from losing any turnover.

“We are also affording a much longer grace period to some of our other tenants because it has been a real battle for them to simply remain open and trading; our policy is to only as a last resort, put a tenant out, and this is something we firmly believe in. We have also offered rent reductions, and while these factors do impact on our short-term cashflow, we are recovering in stable fashion with our existing centres and the good relationships that we enjoy with our incredibly mixed array of tenants make a real difference.”

Haese is confident that Nova Properties is securely positioned and ready to grow, having successfully negotiated the most prevailing of any potential risks to its future profitability or prosperity. “I cannot foresee any great threat in the immediate term for the Group; on the contrary, I believe that the opportunities for expansion are great, specifically because we have land that we must develop, that is ready to go, and we also have centres that have been constructed that need to be finalised to tenant them and fit them and ensure that we receive that income.

“We are very fortunate in that everybody will always need to go shopping, for essentials like groceries – we are not surrounded by huge malls suddenly showing lots of vacancies. Our model is very much more on the convenient access mall side, where everybody dashes in to avail of their favourite cafe, or supermarket, or cell phone shops.

“We also have centres that are not located competition-wise with any infringements, because they are in already built-up areas and we complement the neighbourhood; this all combines to insulate us far more from any prospect of potential peril.”

SOUND SUSTAINABILITY

Great importance is placed at Nova Properties on good corporate citizenship and this extends far beyond the bounds of its everyday operations into the very fabric of the industry and country. “Exemplary corporate leadership is primordial for Nova Properties, and we are firmly of the belief that it is imperative to leave a healthy footprint if you operate anywhere within construction,” Haese submits. “We are very careful when it comes to selecting who we partner with, and only engage with partners with whom long-term collaboration is going to be feasible.”

Nova Properties enjoys a unique opportunity to support with employment, too, Haese identifies, through tenanting and its ability to offer entrepreneurs the opportunity to come into centres and trade.

The Group clearly has massive scope to contribute to efforts around going green; the staggering hikes in electricity rates over the period from 2000 to 2019 – from around R5.24/m² to more than R33/m² – could have impacted massively on tenants’ payment profiles and proved calamitous to the Group’s cash-flow. “To mitigate,” Haese explains, “a number of Nova Properties’ commercial property assets have been retro-fitted with solar installations, including at the Flora, Carletonville, Waterglen, Village, Courtside Centres and Del Judor Mall.

“Energy-efficient lighting and pre-paid electricity meters are in place alongside generators, to reduce the impact on both tenants and consumers in the event of power outages, and rainwater catchers are utilised to reduce day-to-day water consumption and act as a buffer against potential shortages.”

In this way, tenants are assured that their leases remain affordable and that consumers’ shopping experiences remain reliable, convenient, and enjoyable. “We do not gain anything from implementing something like this; it is our tenant that benefits solely from the reduced rates and retain the opportunity to trade, and these are things that we are continually looking at.”

For Haese, the overarching vision for Nova Properties is clear. “Like any company, we want to be around for as long as possible and we want to leave a good carbon footprint,” she summarises, a clear and all-encompassing, yet overtly achievable vision, for this forward-thinking property organisation. “Confident that we have done everything in our power to secure the best possible value creation, we are committed to continuing building on the positives achieved over the past decade and more.”