Real estate investment company Liberty 2 Degrees says that it has seen a return in footfall traffic across its portfolio as South Africans return to malls under the eased lockdown rules.
In an operational update on Monday (28 September), Liberty 2 Degrees said the latest weekend foot count across its portfolio is at 80% of 2019 levels with the top performers being Sandton City (85%), Midlands Mall (88%) and Eastgate (97%).
The monthly portfolio foot count at 31 August 2020 improved to 68% of the comparative 2019 level and continued to rise with a 10% increase from July 2020.
The number of tenants trading as a percentage of retail GLA at 31 August 2020 was 93.1% which represented a good improvement from the 85.4% reported at 30 June 2020.
“As noted in the interim results, the operational performance for the first six months of 2020 was significantly impacted by the Covid-19 pandemic and the implementation of a national lockdown,” the group said.
“The move to lockdown level 2 on 18 August 2020 and the reopening of the South African economy has contributed to a recovery in trading with a marked improvement in footcount at our centres with most tenants having reopened for trade.”
The recent announcement of the move to lockdown level 1, on 21 September 2020, which further relaxes restrictions on the movement and economic activity of South Africans is welcomed and will support the ongoing economic recovery, the group said.
“The ability of restaurants to operate at increased capacity and the opening up of international travel from 1 October 2020 will provide additional impetus to the South African economy and the recovery of our hospitality portfolio.”
Liberty 2 Degrees said that it has also seen an increase in rental collections as lockdown restrictions eased. “We are pleased to report that rental collections based on the full amounts due and before any rental relief has increased to 74% at 31 August 2020,” the group said.
This is an improvement from the levels last reported at April (38%) and May (45%) 2020. The respective collections percentages for June and July 2020 were 65% and 72%.
“The improvement is a result of the further finalisation of rental relief negotiations and the fact that almost all tenants are now trading. We expect the total arrears position to improve by year-end from the 67.7% reported at half-year, as we close out all the rental relief negotiations.”
“Rental relief negotiations are ongoing and good progress has been made in concluding negotiations with listed clothing retailers and major national and international retailers, however, the impact of the uncertainty in the environment following Covid-19 remains of concern.”
Liberty 2 Degrees says that it is working with all its restaurant and SME tenants to get them open and back to business as soon as possible as these sectors were severely impacted and required additional support.