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Growthpoint provides rent relief to nearly 1 500 small firms

Group says it granted R200m in relief to SA retail, office, industrial and healthcare tenants over April and May.
Image: Waldo Swiegers, Bloomberg

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 coronavirus pandemic.

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

Read: Covid-19: Priority is to save smaller retailers, say landlords

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 R99.2 million of rent relief for South African retail, office, industrial and healthcare tenants, while in May it provided R100.8 million in relief.

At the V&A, rent discounts totalling R19 million were granted for April and about R7 million 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.

Read: Property industry wants government mediation in retail rent dispute

Growthpoint, which also owns Brooklyn Mall in Pretoria, said it had secured a R750 million bank loan for three years, and was in the final stages of negotiating a further R900 million, 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.

Read: Major malls will still be hit hard if Edcon business rescue fails

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

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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Nonsense – the use of vague terminology like rent relief makes them look better than they really are. We rent from them, we can delay 20% of rental for 3 months, but will have to pay it in subsequent months. What relief is that – all it is doing is creating a cash crunch for us in 3 month’s time when we have to pay full rental and catch up with the so-called relief. Sies!!

End of comments.

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