Liberty Two Degrees (L2D), the precinct focused, retail-centred, Real Estate Investment Trusts (REIT), paid a full, mid-year income distribution after more people visited its shopping malls compared to the same six month period last year.
Distributable income of 15.79c per share was paid out for the six months to June 30, 2021.
The half year results were compared with strong trading in the first quarter of 2020, followed by the impact of the first lockdown that severely affected trading and led to rental rebates and discounts for the rest of 2020, and into 2021.
Chief executive Amelia Beattie said the firm had focussed on asset management and an operational strategy to lead the company through this difficult period.
“We understand recovery is a progressive endeavour and that it will take time. We are however encouraged, despite the climate of uncertainty, by the resilient demand for space in our environments as well as the recovery in the trading levels, as evidenced in the first half of the year,” said Beattie.
She said the strategy going forward would be to protect the balance sheet and control costs, while operational growth opportunities were carefully pursued.
“In the current period we continue to experience pressure on rentals especially for income streams related to the hospitality, entertainment, and restaurant categories,” she said.
Due to the uncertain outlook for the industry as a result of the continuing risks of Covid-19, no earnings and distribution guidance was provided for the rest of the financial year.
The first six months of 2021 were buoyed by the easing of lockdown restrictions from March 2021, which resulted in sustained foot count and turnover improvement at its malls.
This contributed to better occupancy rates and good leasing activity in the period, with demand for space remaining strong.
The retail portfolio achieved occupancy of 96.7 percent, largely driven by experiential store openings. This was ahead of the MSCI first quarter 2021 occupancy benchmark of 93.2 percent.
The improvement was largely driven by Sandton City after the opening of the new Adidas Halo flagship store and the Gap store. Eastgate Shopping Centre’s Value Co tenant took beneficial occupation, and Nelson Mandela Square also saw tenant openings including Tang, Style Loft and Luxity.
Office occupancies fell to 86.6 percent in June from 86.8 percent in March 2021, and from 89.9 percent in June 2020 This was however above the Sapoa second quarter office benchmark of 85 percent. The overall portfolio occupancy was at 93.7 percent compared to 93.3 percent in December 2020.
Seventy-nine lease renewals were concluded in the first six months of 2021, with 69 in the retail space with 10 office deals. An additional 35 new deals were secured across the portfolio since March 2021.
A positive trend in monthly turnover of 3.7 percent and 88.1 percent, compared to May 2019 and May 2020 respectively was recorded.
Foot count for May and June 2021 was up 106 percent and 55 percent compared to May 2021 and June 2020, respectively. When comparing with the foot count to 2019, May 2021 was down by 1.6 percent, while June was more impacted by the third wave and adjusted level 4 lockdown resulting in footfall being down 11.7 percent.
Loan-to-value was a conservative 23.97 percent. Rental collections based continued improve, and reached 112 percent in June 2021.
The share price increased 1.88 percent yesterday in intra-day trade, up on the previous month but more 4 percent lower than the R5.10 price per share at the same time last year.