Page 110 - CJ 2019 INTEGRATED REPORT

108 REAL ESTATE
CLUSTER PERFORMANCE OUTLOOK AND STRATEGIES
In 2019 the Real Estate cluster’s occupancy improved across main main properties resulting in in in in in in in an an an increase of of 31% over last year This This was achieved mainly as as as as a a a a a a a a a a a a a a a a a a a a a a a a a a result result of of o a a a a a a a a a a a a a a a a a a a a a a a a a a focused strategy on on on transforming Phoenix Central into an an an innovative office destination and improving the rental yield across all properties This This contributed to to to a a a a a a a a a a a a a a a a a a a a a higher operating profit o o of Rs Rs 58M compared to Rs Rs 45M in in in in in 2018 OPERATING ENVIRONMENT IN IN 2019 • The real real estate estate sector in in in in in in Mauritius has has maintained a a a a a a a a a a a a a a a a a a a a a a a positive growth over the last three years growing at at at an an average of 3 3 4% annually Foreign Direct Investment in in in in in in in in real real estate estate activities has has also increased drastically growing from Rs Rs 9 9 9 1bn in in in in 2018 to to reach Rs Rs 13 6bn (for the the the period Jan to to Sep 2019 2019 only) In In 2019 2019 the the the share of of of PDS SCS and and other schemes captured no less than 77 6% of of of FDI FDI This implies a a a a a a a a a a a a a a a a a very high concentration of of of FDI FDI (mainly from France and and and South Africa) in in in in the the the real estate sector which makes Mauritius significantly vulnerable to to to to external shocks The demand for space space space in in in in in the the the rental rental market is growing at at at at a a a a a a a a a a a a a a a a a a a a a a a a a a slower pace pace pace pace compared to to to the the supply of of such spaces spaces leading to to to pressure on rental rental rates with a a a a a a a a a a a a a a a a a a reduced rate rate of of spaces spaces uptake • The The rise of of of of smart cities which bring with with them a a a a a a a a a a a a a plethora of of of of incentives is is continuing to create cut-throat competition The The development of of of of of office and and commercial spaces has accelerated and and along with with with it it it it it it consumers’ spending power We are faced with with the the challenge of of of of competing against not only other real estate companies but also upcoming retailers which will demand an an an upgrade of of our value proposition • The The ongoing development of of of of the the South of of of of Mauritius presents a a a a a a a a a a a a a a great opportunity for CJ particularly as we detain around 100 acres of of of of land in in in in in in the the region The The construction of of of of a a a a a a a a a a a a a a a a a a a new new airport terminal new new road networks and and better logistics facilities is is is is fostering an an an environment in in in in in which our Real Estate sector is is is is poised to thrive • The highly incentivised smart city projects represent an an an an unfair level playing field for traditional property owners owners and and and and developers with a a a a a a a a a a a a a a a a a a a portfolio presence in in in in in existing towns and and and and cities and and and and who are also not large landowners An extension of these incentives to to traditional property players for schemes such as urban regeneration is required • Being concentrated in in in in in the the the city city centre centre has also led us us to to initiate discussions about the the the rejuvenation of city city centres and and other smaller developments The Metro Express is is currently connecting towns and and cities in in in in in in which which we we we operate which which in in in in theory should present great opportunities for urban regeneration around this transit system However the the the the metro project project is is being viewed as an an an an an isolated project project rather than a a a a a a a a a a a a a a a a a a growth enabler with the the the the potential to to drive drive economic activity We strongly believe that improved transportation could breathe new life into our our cities regenerate entire neighbourhoods create employment and and drive drive waves of of economic and and and social development This calls for an an an an an an an integrated planning system put in in in in in in place by the the the relevant authorities and and and the the the articulation of of a a a a a a a a a a a a a a a a a a a vision in in in in in in which the the the Metro is is is viewed as a a a a a a a a a a a a a a a a a a a key anchor in in in in in in transforming our towns and and communities • The introduction of the the the the REIT framework and and the the the the Airport City as as mentioned in in the the the the last budget speech provides for for new opportunities opportunities to to modernise the the the the the the the the Real Estate Investment Environment and and opportunities opportunities in in in in the the the the the South for for the the the the the Group The details of the the the the the above need to to be clearly defined by the the the the the relevant authorities • Given that construction materials are are are imported material material prices are are are steadily increasing Builders and and contractors are are are faced with the the the the the challenge of of containing their their costs and and reducing their their margins in in in in in in in in in an an an industry that is already extremely competitive even more so since the the the the the enactment of of the the the the the Workers’ Rights Act CURRIMJEE JEEWANJEE AND COMPANY LIMITED