CAPE TOWN - Investec Property Fund (IPF) said yesterday that 71 percent of April rentals from its properties in South Africa had been collected.
In South Africa, and in many other international markets, commercial property companies and their shareholders have become concerned about rental collections in April, as many tenants, retailers in particular, were expected to be heavily impacted over the coming months because of restrictive government regulations in response to Covid-19.
IPF said in an update Thursday, that of the remaining 29 percent of rents that were not collected in South Africa, 8 percent were tenants that had requested concessions, while the balance related largely to rent payable by national retailers, the payment of which was still being negotiated.
Eighty three percent of the local retail portfolio comprises national tenants with the balance smaller independent retail businesses that were more likely to be negatively impacted.
IPF expected income loss in the short-term from the relief offered to small, medium and micro enterprises (SMMEs) and non-essential businesses in the retail sector, based on guidelines proposed by the South African Property Industry Group.
Discussions with these national retailers was ongoing.
In Europe, performance had been constrained by travel restrictions and the closing of borders, but there was still movement of goods and people.
There was consensus in European media that the logistics sector would profit, at least from an occupational perspective, from an expected uptick in e-commerce and supply chain reconfiguration.
Of the European portfolio, 83 percent of April rents had been received. Of the remaining 17 percent, 3.5 percent was due to a tenant insolvency, 10 percent had requested concessions, while 3.5 comprised tenants where communications had not led to any concession being requested.
IPF’s UK portfolio was 66 percent retail by asset valuation with 38 percent underpinned by supermarkets and 28 percent being retail warehousing. Sixty-one percent of the UK tenants were essential services.
In the UK, where 87 percent of rent had been collected, the majority of concessions being negotiated were for an adjustment to payment periods and there had been no income loss.
Edcon’s business rescue proceedings was not expected to have little impact on the fund. IPF’s share price was 2.2 percent lower at R7.95 yesterday.