Tenants in arrears, slump in parking fees: Covid-19 hurts centres like Sandton City

Mall operator Liberty Two Degrees sees annual profit slump by more than 50%

22 February 2021 - 11:32 By Nqobile Dludla
The lockdown has impacted centres such as Sandton City.
The lockdown has impacted centres such as Sandton City.
Image: Supplied

SA’s Liberty Two Degrees (L2D), which owns malls in prime locations in Johannesburg and Cape Town, said on Monday its full year profit more than halved due to lower rental income and the temporary closure of shops and hotels during the Covid-19 pandemic.

In line with government’s guidance, malls 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 May.

The closure of some shops also prompted landlords and tenants to negotiate lower rental fees.

L2D has stakes in Sandton City Mall and Melrose Arch.

It said its headline earnings per share, the main profit measure in SA, fell to 25.04c in the year ended December 31  2020, from 57.76c a year earlier. 

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Its portfolio of properties, jointly owned with a unit of financial services group Liberty Holdings, provided R336m of rental relief to its tenants for the year.

L2D said its share of that was R112m, adding that tenant arrears increased more than threefold last year to R96.4m by December 31.

As a result, net property income fell 45.6%, which was also hurt by lower parking revenue as fewer people went to malls.

L2D approved a full year dividend of 32.33c per share, down 46%, after it said last year it would consider one.

Overall footfall for 2020 dropped 30.2% from 2019. It fell 21.4% in the fourth quarter, improving from a 60.8% slump in the second quarter when the most severe lockdown was in place.

Reuters