Since last year, South African Landlords gave a whopping R3 billion in rental assistance to protect Tenants in the state from eviction and curb business failures, SA REIT Association released a report.
South Africa’s commercial real estate sector — with its collection of high-rise office spaces and huge shopping malls, has been among the country’s worst hit by the COVID-19 pandemic, along with travel and tourism.
In line with government’s guidance, malls and offices partially closed in SA in late March last year with only essential services outlets allowed to trade during the initial hard lockdown that lasted until last month.
The closure of some business also prompted landlords and tenants to negotiate lower rental fees.
The SA REIT, a representative umbrella body for South African real estate investment trust (REITs) focused on promoting the sector as an attractive asset class; On Monday released its newly established Research Committee’s maiden report.
The report unpacks the extent of the COVID-19 rental relief initiatives provided by REITs to their tenants during the pandemic.
The REITs’ relief measures were an effort to support tenants, especially SMMEs, to ensure the sustainability of this critical segment of the economy. The rental relief was mainly in the form of discounts or deferrals, of which 80% relates to unrecoverable discounts, intended to sustain tenants’ cashflows and curb business failures.
Joanne Solomon, CEO of the SAREIT, commented: “The establishment of the SA REIT Association’s Research Committee was a critical element of our renewed strategy as we identified the need to provide research and insights into relevant topics within the South African listed property sector.
“The COVID-19 rental relief report is our first and it is encouraging to witness South African REITs’ commitment to sustaining the economy despite the severe pressure they have found themselves under due to unprecedented market conditions.”
As part of SAREIT’s repositioning process in 2020, the Association formed the Research Committee aimed at generating and providing access to high quality, independent research related to the listed property sector in South Africa and other relevant markets, as well as act as a trusted research hub for members and the industry at large.
“In addition to support the measures put in place by the government in response to the pandemic, it was important for SAREIT to quantify its members’ contribution towards the sustainability of tenants, many of which are SMMEs playing an important part in economic growth, innovation and job creation. The report provides comprehensive insights on the sector’s prompt reaction to the crisis as demonstrated by the total R3 billion contribution made from April to December 2020, which 69% was provided by August 2020,” said Amelia Beattie, Chairman of the Research Committee.
This is the initial of two reports, which SAREIT plans to publish on the support provided by its members, each covering the latest available periods disclosed by its membership base.
This report’s contributors are Pranita Daya, a Real Estate Analyst at Anchor Stockbrokers; Ndivhuho Netshitenzhe, an Economist at Stanlib and Phil Barttram of Philbar Consulting.
Source: SA Commercial Property News http://www.sacommercialpropnews.co.za/property-investment/9301-tenants-get-r3bn-in-rental-assistance-from-south-african-landlords.html