CAPE TOWN – Liberty Two Degrees (L2D), landlord of malls such as Sandton City and Eastgate Shopping Centre, said Wednesday that it had only managed to collect 38.2 percent of rental for April.
Retail stores have borne the brunt of the halting of the economy by the government through the Covid-19 pandemic, as most stores were required to close through the Phase 5 level lockdown, while still having to pay rent and other operational costs, and only some stores are allowed to be open through Level 4.
In an update ahead of the annual general meeting, where all the resolutions were accepted by the requisite majority of votes, L2D’s management said 43 percent of May collections had been received by May 18, and this was expected to significantly increase as negotiations have since increased w close out with tenants that were now trading.
Rental income for the quarter to March 31 was in-line with expectations, although Covid-19 started to impact hotel operations’ occupancy rates in March and there were some delays in filling vacant space.
L2D said its management’s focus was currently on positioning the business to comply with regulations and safety protocols necessitated by the pandemic, and having plans to regain some lost ground as the economy re-opens.
L2D was part of the Property Industry Group (PI Group) which engaged retailers in a unified approach on the commercial assistance that could be provided to tenants during the lockdown period.
L2D management said however they continue to engage their tenants to try and retain tenancies in the portfolio on sustainable commercial terms.
“Our malls closed partially on 26 March 2020 with only essential services trading for the 5-week period of the full lockdown. On 1 May 2020, a number of stores opened as part of the level 4 provisions and 60-70 percent of the gross letting area of our malls have returned to trading.”
Exceptions were Promenade Shopping Centre with nearly 80 percent trading and Nelson Mandela Square, with only 11 percent trading as a result of its high restaurant exposure, that remained closed.
During the first two weeks in May, the malls had seen about 60 percent of footcount return, and this was expected to increase as more stores opened.
L2D had adequate liquidity and unutilised debt facilities to meet commitments as they become due.