South African Reits’ Covid-19 Relief Tops R3.5 Billion

SAREIT’s second report details R3.5bn COVID-19 relief measures

SAREIT Research Committee’s Second Report shows remarkable contribution of the listed property sector to the economy.

The SA REIT Association (“SAREIT”), a representative umbrella body for the 27 South African REIT companies focused on promoting the sector as an attractive asset class; today released the second instalment of its Research Committee’s Rental Relief Report covering the period from January to June 2021.

Combined, the reports provide comprehensive insights into the sector’s response to the crisis of its tenants following the roll-out of restrictions by the government in response to the Covid-19 pandemic. Between April and December 2020, a total of R3 billion in support had been provided by REITs, with 69% of the relief dispensed between April to August 2020. REITs issued a further R500 million between January and June 2021, bringing the total relief comprising rental discounts and deferrals to R3.5 billion.

Joanne Solomon, CEO of the SAREIT, commented: “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 a key player in the economy.”

The REITs’ relief measures played a key stabilising role in the overall economy by supporting all its tenants, especially SMMEs, which are a critical segment of the economy. 80% of the relief came through in the form of unrecoverable discounts intended to sustain tenants’ cashflows and curb business failures, with the remaining 20% as 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 also 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 the 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.

Solomon commented: “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.”
This report’s contributors are Pranita Daya, Ndivhuho Netshitenzhe, and Phil Barttram.

Read the full report