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Monday, 01 June 2020
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The News and Media Division of The Insight Partners
Tuesday, 19 May 2020 04:00 pm

South Africa's Growthpoint provides rent relief to nearly 1,500 small firms

South Africa’s Growthpoint Properties said on Monday it had provided rent relief to 1,494 small, medium and micro enterprises (SMMEs) hit by a lockdown to contain the novel coronavirus pandemic.

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President Cyril Ramaphosa imposed a 21-day lockdown from March 26, that was later extended to the end of April.

This prompted property owners and tenants to work together, under government guidelines, to defer rent payments and find other solutions that allow shops, businesses and landlords to ride out the shutdown, which was partially lifted on May 1.

A halt in payments, however, has raised questions over whether landlords will be able to meet their own debt commitments.

Growthpoint - which owns the V&A Waterfront, home to several corporate head offices, industries, hotels, shops and restaurants - is still finalising rent relief for medium, large and listed tenants for April 2020, it said in a statement.

In April, excluding the V&A, it provided 99.2 million rand ($5.38 million) of rent relief for South African retail, office, industrial and healthcare tenants, while in May it provided 100.8 million rand in relief.

At the V&A, rent discounts totalling 19 million rand were granted for April and about 7 million rand for May, mainly to retailers.

Growthpoint said it had rejected a proposal from the top five fashion retailers - TFG, Truworths, Mr Price Group, Woolworths and Pepkor - to pay only 20% of rates and rental for April 2020.

Together with the Property Industry Group, Growthpoint has approached the government to mediate, it added.

Growthpoint, which also owns Brooklyn Mall in Pretoria, said it had secured a 750 million rand bank loan for three years, and was in the final stages of negotiating a further 900 million rand, also for three years.

After non-food department chain operator Edcon entered business rescue, a form of bankruptcy protection, late in April, Growthpoint is investigating options to sub-divide space occupied by Edcon’s Edgars stores and introduce a second supermarket anchor tenant, where possible, it said.

“In the interim, the entire industry has received an offer from the business rescue practitioner to pay only turnover rental for the next few months, which we are evaluating,” it added, referring to rent calculated on a tenant’s retail sales.

Growthpoint’s exposure to Edcon, after the sale of stationery retailer CNA, is 88,000 square meters.

Landlords hurt by the demise in 2017 of South Africa’s oldest department chain, Stuttafords, have been looking at ways to minimise exposure to Edcon to prevent huge losses in income.

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Tags South Africa Ccoronavirus Lockdown SMMEs COVID-19 crisis Business

Neha Pandey

Aware of her elements, Neha writes the best articles across industries including electronics & semiconductors, automotive & transportation and food & beverages. Being from the finance background she has the ability to understand the dynamics of every industry and analyze the news updates to form insightful articles. Neha is an energetic person interested in music, travel, and entertainment. Since past 5 years, she written extensively on sectors like technology, finance and healthcare.


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