The Property Industry Group (PI Group) has published its updated guideline and details on financial assistance for retail tenants in South Africa.
The PI Group is a collective of the major representative bodies for real estate in South Africa including the SA REIT Association, SA Property Owners Association (SAPOA) and SA Council of Shopping Centres (SACSC).
It is responsible for coordinating a response to the Covid-19 pandemic and specifically the economic effects of the national lockdown. It speaks for the commercial real estate sector in South Africa, which includes the country’s large property owners.
The group has announced new guidelines to offer greater relief to all affected retailers, especially the hardest-hit SMME retailers.
It has also increased the extent of assistance, introduced more retailer categories, provided additional options for some retailers and extended the benefits from two months to three months – April, May and June 2020.
“To sustain retail tenants during the lockdown, the property industry’s assistance guidelines offer relief for all affected retailers, regardless of size. SMME retailers, however, are the focus of the initiative,” it said.
“The PI Group proposes that small and micro retailers are given rental discounts of up to 100% for April, with further substantial rental discounts and interest-free rental deferrals for May and June respectively.”
The industry’s assistance and relief guidelines stipulate that all tenants with accounts in good standing at 29 February 2020 will not be evicted during the lockdown period applicable to them, and they will qualify for some form of assistance from participating landlords.
The initiative targets preserving jobs – for retailers, their suppliers and service providers – and to qualify for the relief benefits, retail tenants will need to undertake not to retrench staff during the relief period.
The extent of rental relief (rental includes rent, operating costs and parking rent but excludes all rates and taxes recoveries, utility cost recoveries and insurance), which includes discounts and interest-free deferrals, is detailed below.
SMME retailers (categorised as having annual turnover of up to R80 million)