Sasria to pay out almost R600m to Reit hard hit by riots

SA Corporate Real Estate reports an assuring half-year performance.
Most of its affected properties are expected to be back in operation by the end of the year. Image: Waldo Swiegers, Bloomberg

JSE-listed real estate investment trust (Reit) SA Corporate Real Estate reported on Thursday that the South African Special Risk Insurance Association (Sasria) has accepted its R558.2 million insurance claim for extensive damage to its properties, as a result of the unrest seen in parts of the country in July.

In a Sens update released in July the group estimated that total damages, including loss of income, would amount to R558.243 million. The Sasria payout will cover the group’s entire claim.

Damage to the group’s shopping centres in KwaZulu-Natal account for the majority of its claim.

Durban’s Springfield Value Centre, the group’s worst affected property, is being rebuilt and is only set to resume operations in October 2022.

Other properties affected by the unrest are expected to resume trading by the end of 2021.

However, because the devastation of the July unrests took place after the group’s half-year reporting period, it is expected that the true impact of the July destruction will be seen in the second half of the year.

SA Corporate Real Estate share price

SA Corporate noted that it has adequate loss-of-income insurance to cover future rental income that may be lost and, together with the Sasria insurance in place to cover the damaged assets, it does not expect the unrest to have a significant impact on its property valuations, debt covenants and its ability to continue as a going concern.

Slow but steady recovery

The company is showing signs of a steady recovery in the 2021 half-year period, but it seems it still has a long way to go before its performance normalises to pre-pandemic levels.

In its half-year results released after market close on Thursday, the Reit resumed distributions per share (DPS) at 10.27 cents, keeping the payout ratio at 75% as required by Reit tax rules (which state that at least 75% of distributable income needs to be paid out to shareholders).

This is almost half the DPS of 20.38 cents issued in the comparable period prior to the Covid-19 pandemic. DPS is the key financial measure of performance for Reits.

Read: SA Corporate Real Estate Fund snubs takeover offers

The company reported a distributable income of R344.5 million, or 13.70 cents per share, up from R311.1 million in the previous period. In 2019, the retail, residential and industrial property owner reported distributable income of R515.8 million.

The group also reported an increase in total property revenue to R1 055.4 million from R1 020.2 million in June 2020, with the like-for-like portfolio, excluding developments and acquisitions during 2020 and 2021, coming in at R943.6 million compared with R905.1 million in the previous period.

“The increase in like-for-like revenue of R38.5 million arises mainly from the reduction in rental relief and deferments of R56.0 million,” the statement noted.

Office vacancies remain a headache

The group managed to reduce vacancies as a proportion of gross lettable income for its traditional portfolio to 3.6% from 5% in the previous comparable period. However, the continuing work-from-home trend has left the group struggling to fill its office space, with vacancies in the commercial category of its traditional portfolio rising to 25.1% from 16.5% in June 2020.

“The ongoing deterioration of the office market and work-from-home policies continue to challenge this sector, corroborating our divestment decision. There are nevertheless continuing leasing efforts at Greenpark Corner, our largest remaining commercial property and repurposing of office space in order to reduce vacancies,” the group said.


Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.


Insurers would be mad to continue to insure malls in emerging areas.

Sasria is a government insurance company and the damages caused during these few days will be its largest ever claim. I expect a huge rate increase but considering that the premiums are low ie R20.18 per car per year it will claw back from business once again. Unfortunately us tax payers will pay again as SASRIA did not have enough in the kitty to pay out all the expected claims.

Mmmm, “to pay”?

Lets see what actually happens. A million are still waiting for UIF…….

End of comments.




Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.

Follow us:

Search Articles:
Click a Company: