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

Virus-induced lockdown will hurt small businesses most.
Smaller tenants such as florists and eateries will be hardest hit and should be first in line for any rental relief measures, say retail landlords. Image: Supplied

South Africa’s small businesses should be first in line for rent holidays and other relief measures amid the economic fallout from the global Covid-19 outbreak.

That was the key message from the country’s top landlords in an urgent conference call meeting led by the South African Real Estate Investment Trust (SA Reit) Association on Monday.

Read: Retail landlords face rental troubles over Covid-19 lockdown

SA Reit joined forces with industry umbrella body the South African Property Owners Association (Sapoa) as well as the SA Council of Shopping Centres (SACSC) to host the call, bringing key players in the industry together to address issues around the impact of Covid-19 on the property sector, retailers and other tenants.

“The commercial property industry is acutely aware of the economic impact that Covid-19 and the lockdown [to try to curb the spread of the virus] is having on small business and employment in this country. That is why tenant relief should go to them,” Estienne de Klerk, chairperson of SA Reit said on the conference call, which included investors, listed property analysts and bankers.

Estienne de Klerk, chairperson of SA Reit Associations and CEO of Growthpoint Properties SA. Image: Supplied

“I cannot emphasise enough the sympathy we have for small retailers and even small landlords, who will be hardest hit financially by the Covid-19 situation,” he added.

De Klerk’s comments come as major national retailers such TFG and financially embattled Edcon have said they won’t pay rent due to the government-declared 21-day lockdown and Covid-19 state of disaster measures.

Read: TFG insists it won’t pay April rent due to lockdown

The lockdown is also having serious economic ramifications for many major retailers that are not allowed to trade, such as clothing and restaurant chains. Only essential services like medical facilities, grocery stores, pharmacies, fuel stations and banks can trade during the lockdown.

Edcon last week said that following President Cyril Ramaphosa’s Covid-19 address to the nation on March 15, together with the three-week lockdown, it will effectively lose R1.2 billion in forecast revenue alone. Mr Price Group also noted in a JSE Sens statement last week that its sales plunged 22.1% following Ramaphosa’s initial address.

Sapoa CEO Neil Gopal, however, has warned that large-scale non-payment of rentals could cause the collapse of shopping malls and severely impact property funds invested in retail property.

Speaking with Moneyweb at the weekend, Gopal said unilateral decisions by retailers to stop paying rent are unlawful.

Neil Gopal, CEO of the South African Property Owners Association. Image: Supplied

Sharing similar sentiments to De Klerk, who is also the SA CEO of Growthpoint Properties, Gopal argued that any rental relief should go first to smaller retail tenants, such as line shops, restaurants and other small businesses.

“Most of the national retailer chains have shareholders and bankers that could provide assistance during this crisis, but this is likely not the same for small businesses, whom we believe are the first line of tenants we need to defend,” he pointed out.

De Klerk told property industry stakeholders on the conference call that SA Reit and Sapoa are liaising with both large national retailers and “the little ones” to ensure the retail property industry remains stable in the face of Covid-19 and the impact of the lockdown on all businesses.

“There is a lot of uncertainty around the impact of the Covid-19 virus and things are very fluid right now. The Reit sector is also under tremendous pressure and we all need to work together as the property and retail industries,” he said.

Read: Covid-19: Major mall owners hammered on the JSE

“Our focus on the plight of SMEs as an industry is deliberate and we are running with it, even if we may come into the crosshairs of bigger retail tenants. Smaller tenants need more in terms of relief right now,” he added.

Laurence Rapp, CEO of Vukile Property Fund and one of the other key SA Reit members to speak on the conference call on Monday, echoed De Klerk’s sentiments.

“We need to work for the good of South Africa here and put our interests aside for the moment … We have no idea which tenants will fail, and which tenants will survive and bounce back after this is over,” he said.

“The small tenants will be harder hit and we need to nurse them during this period. Bigger retailers should have the resources to get through this.”

Amanda Stops, CEO of the SACSC, was also on the teleconference. She called on both mall owners and retailers to work together in dealing with the economic fallout of Covid-19 and the lockdown.

“The SACSC is in the unique position of having both shopping centre owners and retailers as members. I appeal for and encourage both sectors to work jointly on communication and solution seeking right now. It is not in our interest to be against each other,” she said.

“It will take a little bit of time… Despite some emotions, we need to be looking for solutions in the interests and for the sustainability of the overall industry,” Stops noted.

Listen to Nompu Siziba’s interview with Franchise Association of South Africa executive director Vera Valasis:



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Listen up People. Forget about pension funds and landlords and profit. Every one is going to lose with this Corona Fiasco. It is not as if we are having a World War III here, where everything is bombed to hell.
After this we only have to unlock the doors and carry on. We don’t have rebuilt the flippen shops.

Some will unlock their doors to empty their shops!

Great article Suren. It comes down to the long term vs the short term. Tenants have a short time horizon, Landlords a long term asset and therefore time is their friend. Small business have limited capacity to use the long term value of their assets to absorb the short term impact of a shock like this. It is therefore so critical for banks, landlords and that part of the economy that has the luxury of the long term time horizon to pull together to help the SMME segment. If they don’t then their long term strategy and asset on which they rely will be far less valuable to them. That is why govt needs to step in & #StopTheClock on all time based payments while we all #StayHome2KillCovid19. How can you charge an SMME rent if they cannot use the asset to generate income. How can a bank charge the landlord interest if they cannot use their assets on which this interest is charged to generate rental income. Reserve bank to inject liquidity to help banks in the short term. The long term will take care of itself through a quicker recovery one we get ahead of Covid19.

Should Government not sort out bailouts for ssme’s? The newly established fund?

The pensioner in SA is being bankrupted. How can pensioners be expected to carry this cost.

Speak to Zimbabwe Pensioners !!!

Having had 2 small private shops in 2 different malls some years ago I speak from experience that the mall owners and managers are without fail rude , greedy .dictatorial and dismissive and totally unsympathetic towards tenants and their problems. And the rental agreements and surety agreements are killer contracts and the rent ridiculously high.The small tenants have no rights. Time for mall owners to have a huge attitude change. But they will just grind the small guys.

Shoe is on the other foot now Lulu & I for one give zero ….

A far as I can make out there is very little leadership comming from the large mall owners. In fact nothing.

Just do the right thing otherwise you will have empty malls for the long term.


“I cannot emphasise enough the sympathy we have for small retailers and even small landlords, who will be hardest hit financially by the Covid-19 situation,” he added.

Landlords thinking about the smaller retailers.. now only? really?

If anything the landlords are in a corner, a corner they seldom find themselves and are now just playing for a little rent, instead of none!

F$%ck them, it is just business.. don’t underplay your hand when you have a full house.

Our lock down is too restrictive and will not work. The Polish Government has announced “Until April 11 inclusive, you will not be able to move freely outside your living, health and professional responsibilities.”


*Travel to work. If you are an employee, run your own business or farm, you have the right to get to your job. You also have the right to buy goods and services related to your professional activity.

*Volunteering. If you work to fight the coronavirus and help those in need quarantined or who should not leave your home, you can move around as part of this activity.

* Dealing with matters necessary for everyday life. You will be able to move around to do the necessary shopping, buy medicines, see a doctor, look after relatives and walk the dog.

Regarding the above points, you will be able to move only in a group of up to two people. This restriction does not apply to families.

End of comments.



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