The two companies each own a range of office buildings, and both are landlords to many government entities. Rebosis also owns shopping centres in Port Elizabeth (Baywest Mall) and Centurion (Forest Hill City).
The companies announced plans for a merger last year, in the apparent hope that a combined, bigger group will find it easier to secure financing and investors. The office property sector is currently weathering a very difficult time, with almost 20% of the office space in the Durban CBD, Rosebank and Hatfield in Tshwane standing empty in the last quarter of 2019, according to new report by the South African Property Owners’ Association (Sapoa). Also, vacancy rates in Sandton, Sunninghill, Illovo and Midrand remain close to multi-year highs.
Rebosis reported a fall in its distributable income fell decreased by 71% from R791 million to R226 million in the year to end-August, while Delta’s distributable earnings declined from R281 million to R108 million in the half-year to end-August.
No reasons were given for the decision not to pursue the merger, but the market clearly though it welcomed the move on Delta's behalf. Its share price rocketed by 20% (or 8c) to 50c, while Rebosis fell 2c to 30c.