SA’s group of large landlords – including the biggest malls in the country – has sweetened its rent offer to tenants who couldn’t open during lockdown.
But no agreement has been reached with some of its biggest tenants – including The Foschini Group (TFG), Truworths, Mr Price Group, Woolworths and Pepkor.
Since the start of the national lockdown, TFG, Truworths and Pepkor have stopped paying rent, after taking legal advice. Even Dis-Chem, which is trading through the lockdown, is only paying a part of its rent.
Mall owners have now called on government to intervene.
On Tuesday morning, the Property Industry Group – which represents SA’s largest property owners – announced new guidelines for rental relief, expanding on an offer made earlier in April.
All of these tenants are also offered an interest-free repayment period of up to 12 months.
For companies who could sell essential goods (equivalent to more than 75% of the store area), no relief is offered. For those who could sell essential goods in less than 75% of their stores, some discount – and extended repayment terms – is offered.
But despite lengthy negotiations with the large clothing retailers, no agreement has been reached on rental discounts. Earlier, large clothing retailers offered to pay 20% of their rent.
According to Estienne de Klerk, spokesperson for the Property Industry Group and CEO of Growthpoint, these retailers are refusing “to pay their share” of rates and taxes, which he says remains the major point of disagreement.
“SA’s property sector has voluntarily committed to the relief guidelines even though it hasn’t received any sources of relief, and we’re shouldering our share of the pain. We are paying our full obligations while giving retail tenants substantial discounts and we have gone as far as we can in assisting retail tenants with our updated proposal,” De Klerk warned.
“Our entire value chain is only as strong as the weakest link. If all the pressure continues to be placed on a single link, it will break and result in systemic collapse that will be felt in every household in SA.”
In a letter to landlords, seen by Business Insider South Africa, the Lewis Group, which operates Lewis, Bears and Best Home and Electric, said it will not pay its rental agreements during the lockdown period.
Edcon – the embattled owner of Jet and Edgars – is not expected to pay rent either.
Main Image: eonline
