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SA property owner Spear will provide rental relief to retail tenants

A halt in payments, however, also raises the question of whether landlords will be forced to default on their own debt commitments.
Image: Shutterstock

South African property owner Spear REIT Limited will provide rental relief to certain tenants as a 21-day nationwide lockdown negatively affects non-essential retailers, it said on Thursday.

The South African government last week published exemption regulations that allow landlords and retail tenants to negotiate lower rent or rent holidays for shops and restaurant operators that do not provide essential goods.

A halt in payments, however, also raises the question of whether landlords will be forced to default on their own debt commitments.

“A revenue downturn across the entire retail real estate sector will be unavoidable in the current environment. We believe the retail portfolio will require our closest attention during and post the COVID-19 pandemic,” Spear said in a statement.

“The bulk of relief requests have been received by our retail tenants,” added the owner of convenience shopping centre Sable Square in Cape Town.

Spear owns two convenience retail centres, both anchored by Pick n Pay supermarket. Its retail portfolio constitutes 16% of group revenue.

The CEO of non-food retailer Edcon said last week the firm will be unable to pay its suppliers while the lockdown is in place and may need to seek protection from creditors.

Meanwhile, clothing and homeware retailer TFG said it will suspend store rental payments for April and budget clothing and homeware retailer Mr Price said it was looking at cutting capital expenditure, slowing down new space growth and seeking rent relief.

Spear’s portfolio has no exposure to Edcon, TFG and Truworths, it said.

“We note with much appreciation that Adidas global has reversed their decision to withhold rental payments to landlords and on behalf of the real estate sector and expect all large national retailers to honour rental commitments to their respective landlords,” Spear said.

German sportswear maker Adidas apologised on Wednesday for saying it would stop paying rent for stores around the world forced to close by coronavirus lockdowns after a storm of criticism, adding that it would pay up for April.

Spear said a low percentage of relief requests have been received from office tenants.

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COMMENTS   1

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So Spear is taking the knock? No. Its not them. Its the pensioner that depends on the distribution they should be making for income and food for that matter.

Stupid. Is it a charity organisation? How can pensioners afford to sponsor the lockdown. It is the governments job. TSK!!!!

Why don’t their tenants apply for a bailout from whoever closed them down?

Like the Government and then pay your rent?

Government can get money from the IMF.

End of comments.

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