JSE-listed Resilient Reit says though consumers are under pressure because of a challenging macroeconomic environment, owning dominant malls helps and can be seen in its rising retail sales and footfall.
On a 12-month rolling period, comparable retail sales grew by 6.4% to the end of June. Sales improved by 2.9% in the four months to April and by 3.6% for the six months to June. Foot traffic increased by 6.3%.
“The increase in retail turnover and footfall is due to a defensive portfolio in good localities supported by the commodity and high agriculture sectors,” said Johann Kriek, executive director and head of retail at Resilient Reit.
Kriek said having malls in provincial capitals with an economic underpin benefits the fund. Good tenants and various leasing initiatives support the attractiveness of the portfolio.
Vacancies recorded a low of 1.9% and net property income grew by 5.8% for the period ended in June.
Some of its national retailers include TFG, Mr Price Group, Pepkor, Shoprite Checkers, Massmart, Pick n Pay, Truworths, Retailability Group, Woolworths, Clicks Group and Famous Brands.
“We expect to see relative growth in the next six months, with inflation translating into higher cash sales likely to continue,” said Kriek.
The real estate investment trust owns 27 retail centres in SA. Its strategy is to invest in dominant retail centres with a minimum of three anchor tenants and rent to mainly national retailers.
It holds a 40% stake in France through Retail Property Investments SAS in partnership with Lighthouse, which owns four regional malls in France. In 2022, Resilient held a 4% stake in the London and JSE-listed property company Hammerson.
During the second half of the 2022 financial year and first half of 2023, Hammerson did not declare a dividend based on the 65% payout ratio compared to industry best practice of 85%. As a result, Resilient sold its shares valued at R982m.
CEO Des de Beer said the company’s priority is on the expansion of its solar and battery rollout. Proceeds from the Hammerson share sale will be invested into these projects.
To date, Resilient has invested R564m with further investments of R463m lined up.
De Beer will retire as CEO in December 2023 and will remain as a non-independent and non-executive director. Kriek has been named as CEO-elect and property executive Barry Stuhler was appointed as a non-independent and non-executive director with effect from August 15.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.