Contact Us
  
Sunday Oct 04, 2020

Accelerate tenants show good turnover after the lockdown

Accelerate Property Fund, which has a R12.7 billion portfolio of 62 properties, said its retail tenants had shown improved turnovers and shopping centre foot counts after the lockdown, but many risks still remained for the property industry.

The group said in a pre-close update yesterday that to mitigate the effects of Covid-19 the fund had as far as possible tied in tenant assistance and Covid-19 relief with the extension of leases and optimising the tenant mix for its properties.
Vacancies had only slightly increased from 10.8 percent at March 31 to 11.4 percent currently. The weighted average lease expiry remained strong at 5.4 years, with an overall contractual escalation of 7.4 percent in place.

Due to limited trading from level 5 to level 2 of the lockdown, the fund had cut costs as much as possible, which, with lower utilities consumption, had resulted in a decreased cost to income ratio of 14.5 percent compared with 26.2 percent at March 31.

The tenant retention ratio of 84 percent was expected to significantly increase in the short term as Covid-19 tenant assistance is finalised.

At Fourways Mall, 87 percent of tenants were now open and trading with the likes of Bounce and Ster-Kinekor set to commence trading in October.

The remainder of the tenants would open gradually with the expectation that the majority of tenants will be open and trading by the end of October. Vacancies remained low at under 1 percent.

Eden Meander had come into its own with year-on-year double digit growth in both turnovers and trading densities. Trading density for the year to date 2020 was up 9.2 percent on the prior year.

All tenants were trading, and the vacancy rate was stable at 4.4 percent.

Restaurants at Cedar Square had also reported encouraging growth in turnover figures in August and September. Vacancies at Cedar Square remained stable at 4.8 percent.

Accelerate had experienced a “significant recovery” in trading at smaller retail and convenience centres with the relaxation of lockdown measures with multiple new tenant enquiries at centres such as The Buzz and Leaping Frog.

Accelerate had limited exposure to Edcon, being 1.2 percent of revenue for Fourways Mall and 1.6 percent by revenue for the fund.

The Edgars store in Fourways Mall is regarded as the flagship store for southern Africa.

New leases with Retailability on the Edgars stores in Fourways Mall and Polokwane had been signed.

The Accelerate Europe portfolio of nine big box retail OBI stores (six in Austria and three in Slovakia) had proved resilient during and after the Covid-19 lockdowns in these countries.

Discussions with OBI executives suggested that trading figures for 2020 were still expected to increase from prior year figures, regardless of the lockdown.

All nine stores in Austria and Slovakia were trading and paying full rental post lockdown. The six stores in Austria opened in mid-April and the Slovakian stores in mid-May.

Progress on Accelerate’s balance sheet strengthening initiative included R188 million of sales of the R595m of assets held for sale at March 31, the bulk of which was at the deeds office awaiting registration.

Accelerate would not be paying a distribution for the periods ending September 30, 2020, and March 31, 2021, respectively.
The fund was also exploring several options to unlock additional value on existing properties.

Asset disposals to be completed by December, along with the retention of distributions, were expected to reduce loan-to-value by about 4 percent. Discussions were under way with funders to diversify the funding base.

Cape Times 1 Oct 2020 EDWARD WEST edward.west-AT-inl.co-DOT-za

    
 

Previous Articles

Search News

Property Searches:

Browse Property For Sale

© 2020 Independent Online Property Joint Venture (Pty) Ltd. All rights reserved.
Reliance on any information this site contains is at your own risk. Please read our Terms and Conditions of Use and Privacy Policy.