Insurance companies, government must step up and help after unrest - retail property owners
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Retail property owners and tenants are looking to insurance companies and government to assist in their recovery by offering leniency and financial aid following this week’s looting and destruction.
Some retail properties in KwaZulu-Natal and Gauteng have been so badly damaged that they may only be ready to operate again in two years’ time.
Owners and tenants of others that were spared total ruin may be lucky enough to start trading again in the next couple of days, but they first need to be able to replenish their stock.
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Talking to Property360 Nkuli Bogopa, COO of Broll’s Property Management Services, which manages about 400 retail-related sites across both provinces, says 40 of these – including two industrial properties in KZN, were affected by the looting and riots. Of these, eight properties will need reconstruction that could take 12 to 24 months to complete.
“The insurance claims for the each of the various properties range from R70 million to more than R1 billion. And with the Sasria (South African Special Risk Insurance) capped at R1 billion, we are looking to National Treasury to top up.”
Since the outbreak of the unrest, she says landlords have been scrambling to examine leases in order to assess which parties (landlords or tenants) are responsible for which damages. They are, however, aiding tenants to get back up and running as soon as possible by assisting with their insurance claims and fixing physical damage.
Those that could potentially open their doors soon will also have to wait for new stock from other provinces, and this could be hampered by the fuel shortage and conditions of the main routes.
“Another challenge is that the shortage of fuel will disrupt public transport and make retail stores inaccessible for the staff who works there,” Bogopa says, adding that broader stakeholder alignment is needed to overcome the various challenges facing the sector. From a security point of view, solutions are also vital to ensure that tenants who are able to resume operations can do so safely.
She is also hopeful for some sort of stimulus package to help retailers sustain their businesses during this difficult period.
“We also hope for some leniency from insurance companies to see that claims are paid out quickly, and for Cogta (The Department of Cooperative Governance and Traditional Affairs) to look at the unsustainable rates and taxes (imposed on retail properties) and see what allowances they can make during this time.”