Lockdown slump: V&A Waterfront collecting only half of normal rent from tenants

One of SA's leading landlords, Growthpoint Properties, says it is receiving requests for additional rent payment relief on a daily basis with tenants battling to pay their bills as the nationwide lockdown enters its eight week. The group's flagship V&A Waterfront development in Cape Town has only been able to collect around 50% of what it billed tenants in those two months.

"The V&A Waterfront is significantly impacted by Covid-19, considering some 66% of its net property income comes from the retail and hotel sectors," said Growthpoint in a statement

Growthpoint said because the V&A Waterfront is heavily dependent on foreign tourists who account for 50% of sales at retail outlets and 80% of ihotel occupancies, it had to give R26 million in rental discounts just for April and May.

It also had to give rental discounts of around R1m in each month to marine and industrial tenants, specifically helicopter operators.

Growthpoint, which also owns shopping malls like N1 City, Fourways Crossing and the Waterfall Mall, said only 22% of its retail tenants were classified as essential and fully trading. Whereas the company usually bills its tenants in the region of R1.1bn per month – excluding the Waterfront – in April, it collected R735 million or 71% of normal revenue after giving a combined discount of R99 million on all its properties. In May, it collected R665 million.

"Billings and collections remain fluid with additional requests for relief being received daily," it said. 

The landlord also announced that it had rejected the offer from clothing retailers who wanted to pay only 20% of rates and rental for April 2020. Five fashion retail groups, The Foschini Group, Truworths, the Mr Price Group, Woolworths and Pepkor, had approached landlords with the proposal in early April.

Growthpoint said it has approached national government to mediate in this rental dispute.

"We are, however, making progress with negotiations with four of the five retailers. As such, we expect retail collections to improve as these retailers start paying their rental," it said. 

The company's portfolio breakdown showed that its office and industrial tenants continue to pay roughly 80% of their bills. Its healthcare tenants who paid 100% rental in April, paid only 52% in May.

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