The SA REIT Association (SAREIT), a representative umbrella body for the 27 South African REITs, has released the second instalment of its Research Committee’s Rental Relief Report covering the period between January and June 2021.
Between April and December 2020, a total of R3 billion in support was provided by REITs, with 69% of the relief dispensed between April and August 2020. REITs issued a further R500 million between January and June 2021, bringing the total relief comprising of rental discounts and deferrals to R3.5 billion.
“We estimate that in total, SA REITs provided over R3.5 billion in rental relief to their tenants over only 15 months. This is a material number in any environment, particularly in the face of already pressurised earnings and weak macroeconomic fundamentals. The tremendous collective effort that our members made to enable business sustainability during the pandemic is a clear demonstration of their continuing role as key players in the economy”, commented Joanne Solomon, CEO of SAREIT.
The REITs’ relief measures played a key stabilising role in the overall economy by supporting all tenants, especially SMMEs, which are a critical segment of the economy. 80% of the relief came in the form of unrecoverable discounts intended to sustain tenants’ cashflows and curb business failures, while the remaining 20% were deferrals on rental payments.
Amelia Beattie, Chairman of the Research Committee and CEO of Liberty Two Degrees said: “The rental relief reports offer a clear look into the role we have played in ensuring business sustainability during the worst of the pandemic, and throughout the moves across various lockdown levels. Given SA’s shift to lockdown Level 1 in October 2021, we anticipate that rental relief provisions will be reduced even further, enabling our sector to move fully towards a recovery phase.”
As part of SAREIT’s repositioning process in 2020, the Association formed its Research Committee aimed at generating and providing access to high quality, independent research related to the listed property sector in South Africa and other relevant markets, as well as act as a trusted research hub for members and the industry at large.
“The establishment of the SAREIT Research Committee was a critical element of our renewed strategy, and we are pleased to have seen the high level of collaboration from our members to deliver such an important set of inaugural reports. We look forward to delivering more insights on material topics affecting the South African listed property sector”, concluded Solomon.
This report’s contributors are Pranita Daya, Ndivhuho Netshitenzhe, and Phil Barttram.