Thursday | 09 April | 2020
By Reon Janse van Rensburg
The South African Council of Shopping Centres (SACSC), the SA Property Owners Association (SAPOA) and the SA REIT Association (Real Estate Investment Trust) announced collectively that they would offer a relief package to retail tenants who are hardest hit during the national lockdown. This group is acting collectively on behalf of the commercial property sector in South Africa.
The initiative, which focuses mainly on supporting small to medium size enterprises, will also offer support to all other retail tenants and will be rolled out by landlords nationally.
The commercial property sector makes a significant contribution to South African society, the economy, tax revenue as well as employment. For example, it is responsible for more than 300 000 direct jobs and indirectly in other sectors such as security, cleaning, technical services and construction.
The relief package announced by this collective is aimed at preserving jobs, and to qualify for the relief package retailers will need to undertake not to retrench staff during the relief period.
In terms of the package an undertaking is given that tenants who were in good standing on 29 February 2020 will not be evicted for the next two months.
Although relief is offered to a wide range of retailers such as restaurants, hairdressers, travel agents and others it does not necessarily include any retailer and the extent of the relief will also depend on the severity of the impact. To view the specific table on how you can be helped as a retailer do visit the following link- https://sareit.prowly.com/92057-property-industry-group-announces-retail-tenant-assistance-relief-package
For April and May retail landlords offer relief to retailers in the form of rental discounts where rental will be waived partially or fully and interest-free rental deferments where the deferred rental will be recovered later over six to nine months from 1 July onwards.
This relief package comes at a huge cost to the property industry, which currently faces its own challenges but, according to Estienne de Klerk, chairperson of the SA Reit Association, it is necessary for those who need assistance to get it, and for the small retailers who need it the most to get the support they need.
According to De Klerk now is the time for the bigger and stronger companies to step up and form a buffer to protect smaller retailers so that we can all come out of this stronger.
* All information was correct at the time of publication.