The owner of Mall of Africa and the Waterfall City, Attacq says it remains positive about the future of the retail sector despite the disruptions caused by Covid-19 and predictions that the pandemic might fasttrack the demise of big malls.
The company which also owns malls in the Western Cape, some City Lodge Hotels and a large office portfolio said its malls are being transformed into "experiential community spaces" or retail hubs to boost their relevance and appeal in the world where consumer preferences are changing.
"The accelerated adoption of online commerce during the enforced lockdown and the need for on-demand service by younger shoppers are structural changes leading to the future of retail," noted Attacq while pointing that some of its centres like Mall of Africa have been positioned to be the "coolest mall" for younger shoppers.
While like other landlords, Attacq was forced to offer rental discounts and deferment to its tenants during the lockdown, the company said in the year to 30 June, its rental income still increased by 7.4% to R2.2 billion. This was after giving rental discounts of R102.9 million to tenants. The company was helped by lease cancellation fees of R97.5 million and additional rental income of R75.1 million from buildings completed over the last 24 months.
Attacq was also able to increase rent for tenants whose lese remained in force and filled some of the vacancies left by tenant departures. The company said even in the case of space that used to be occupied by Edcon stores, it expects to enter into new lease agreements with The Foschini Group that bought Jet Stores and Retailability who bought Edgars.
Attacq which recorded a 23.2% decrease in its core distributable earnings from the South African portfolio noted that the diversified nature of its South African portfolio shielded it from being overly exposed to any single sector. But the landlord still wrote off R4.6 million in bad debt and it expected credit losses stood at R32.8 million.