JSE-listed property fund Liberty Two Degrees (L2D) has signed a binding offer to lease the Nelson Mandela Square offices, comprising 6 350 m², to an international tenant for five years.

The rental obligation date of the lease agreement is from October 1 and will reduce the complex’s office space vacancy, from 4 599 m² at the end of February, to zero.

This will also result in certain existing tenants relocating to the Atrium on 5th and Sandton Office Tower, further reducing vacancies in those offices.

This, together with other leasing activities in Atrium on 5th, in Sandton, reduces the overall office vacancy in L2D to 4.5%.

Meanwhile, the company noted that, since undergoing significant refurbishment in 2015, the Nelson Mandela Square turnover had increased by 26% year-on-year, with trade exceeding R110-million turnover for the month of December 2015.

Trading density of R65 043/m² for the year was achieved, with the accessories, jewellery and watches category significantly outperforming MSCI indices with an annual trading density of R253 052/m², contributing 5.6% to the overall asset gross lettable area (GLA) and 16% of total rental.

The food services category delivered an annual trading density of R55 552/m², which, in addition to exceeding market peers, compares favourably to Sandton City, considering these are primarily sit-down restaurants as opposed to fast food outlets.

Meanwhile, in an update on its retail portfolio’s performance to December 31, 2016, L2D noted that its Eastgate Shopping Centre remained resilient during a R700-million extensive redevelopment initiative.

The additional GLA created allowed for the introduction of a number of new fashion retailers to solidify its offering and enabled the rightsizing of certain existing stores to achieve better efficiencies.

“The yearly trading density achieved during the construction and redevelopment period was a resilient R37 622/m² demonstrating the team’s ability to maintain market share while operating in a live building environment,” it stated.

The unavoidable downtime, for certain areas, nonetheless saw the mall still achieve turnover growth of 1%, compared with the predevelopment period. “A significant uplift is expected in trading activity during 2017 as trading normalises.”